Sunday, July 24, 2005

Indo-Iran pipeline in focus again

“... I am realistic enough to realise that there are many risks because, considering all the uncertainties of the situation there in Iran, I don’t know if any international consortium of bankers would probably underwrite this. But… we desperately need the supply of gas that Iran has.”

So said Dr Manmohan Singh to The Washington Post. The Acorn sees it as an endrosement of a long-held stand.

Dr Singh might have just been a good host, as I pointed out here. But Oil Minister Mani Shankar Aiyar followed up with this: "The Iran-Pakistan-India gas pipeline is fraught with terrible risks. It will be extremely difficult to put together an international consortium to finance the project". For good measure he also said, "God willing, we'll succeed".

Now look at the PM's statement for a while. He plainly states that the project is frought with risks. Nothing new. If it was not, the pipeline would have been ready in the last millenium. Aiyar reiterating the difficulty in getting the international guarantees in place is also straight talk. So far so good. What bugs me is something else.

India has consistently maintained that unless all security risks are mitigated, which means we have adequate and economically viable insurance policies against them, India will not go ahead with the project. However, this is probably the first time that the difficulties being faced in this direction are being publicly announced. And that despite the fact that construction start dates, and commercial commencement dates have already been bandied around.

Does this mean that India is preparing to go ahead with the project without adequate guarantees? That would be suicide.