Pakistan asks Iran to suspend obligations in multi-billion-dollar gas pipeline project

Iranians work on a section of a pipeline (on with are sticked Iranian and Pakistanese national flags) after the project was launched during a ceremony with presidents of Iran and Pakistan on March 11, 2013 in the Iranian border city of Chah Bahar. (AFP/File)
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Updated 08 August 2023
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Pakistan asks Iran to suspend obligations in multi-billion-dollar gas pipeline project

  • Iran’s foreign minister last week urged Pakistan to complete its part of the much-delayed pipeline
  • Pipeline has not been completed yet mainly due to lack of funds in Pakistan, US sanctions on Iran

ISLAMABAD: Pakistan has sought the suspension of its contractual obligations in the multi-billion-dollar Iran-Pakistan (IP) gas pipeline project, Minister of State for Petroleum Dr. Musadiq Malik said in a testimony to parliament seen by Arab News on Monday, citing US sanctions on the project as the main hurdle toward Pakistan meeting its side of the bargain.

Discissions to build the 2,775-kilometer pipeline to deliver natural gas from Iran to Pakistan began in 1995 but it has not been completed yet mainly due to lack of funds in Pakistan and complications posed by US sanctions over Iran’s nuclear activities.

Under an agreement signed between the two countries in 2009, the gas pipeline project was to be completed by December 2014 and would deliver 21.5 million cubic meters (760,000 million cubic feet) of gas per day to Pakistan. It was to be constructed using a segmented approach, which means Iran had to lay down the pipeline on its side and Pakistan was supposed to build the pipeline on its territory.

In written testimony to the National Assembly, Malik said work on the pipeline was stalled due to US sanctions on Iran and project activities would begin once they the bans were removed and did not pose a danger to Pakistan’s state-owned entities.

“Pakistan has issued a Force Majeure and Excusing Event notice to Iran under the Gas Sales and Purchase Agreement (GSPA), which resultantly suspends Pakistan’s obligations under the GSPA,” Malik wrote, adding that Iran disputes the validity of the notice.

Force majeure is a clause included in contracts to remove liability for unforeseeable and unavoidable catastrophes that interrupt expected course of events and prevent participants from fulfilling obligations.

“The matter will be finally settled through arbitration, should Iran take this matter to arbitration,” Malik said. “The exact amount of penalty, if any, is subject to the outcome of the arbitration to be determined by the arbitrators.”

Malik said the Pakistani government was engaged with US authorities through diplomatic channels to seek an exemption from sanctions for the gas project.

“All necessary actions are being taken to construct the gas pipeline at the earliest,” he added.

Last week, during a visit to Pakistan, Iranian Foreign Minister Hossein Amirabdollahian urged Islamabad to complete its part of the much-delayed project. 

Under a penalty clause, Pakistan is bound to pay $1 million per day to Iran from January 1, 2015 for failing to complete the pipeline’s construction on its territory. If Iran takes the case to an arbitration court, Pakistan will likely to have to pay billions of dollars as penalty.


Deputy PM Dar invites Chinese entrepreneurs to set up labor-intensive industries in Pakistan

Updated 6 sec ago
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Deputy PM Dar invites Chinese entrepreneurs to set up labor-intensive industries in Pakistan

  • Deputy PM Dar delivers keynote address at Pakistan-China Roundtable Conference in Beijing 
  • Dar says Pakistan offers “attractive incentives” in exchange for setting up industrial units in country

ISLAMABAD: Deputy Prime Minister Ishaq Dar on Thursday invited Chinese entrepreneurs to establish labor-intensive industries in Pakistan, state-run Radio Pakistan reported, as Islamabad seeks foreign investment to bolster its fragile $350 billion economy. 

Dar arrived in Beijing on May 13 to co-chair the fifth round of the China-Pakistan Foreign Ministers’ Strategic Dialogue with his counterpart Wang Yi. 

The deputy prime minister undertook the visit to bolster relations with China, assure Beijing that Pakistan would enhance the security of Chinese nationals and hold key meetings with business officials and entrepreneurs there. 

“Deputy Prime Minister and Foreign Minister Ishaq Dar has invited Chinese entrepreneurs to take advantage of the investment-friendly policies and set up labor-intensive industry in Pakistan,” Radio Pakistan reported. 

Dar made these comments during his keynote address at the Pakistan-China Roundtable Conference in Beijing. The deputy prime minister said Islamabad had expedited the construction of special economic zones in the country and offers “attractive incentives” to establish different industrial units in the country. 

“He said the government has worked out 13 key areas having great potential for Chinese and Pakistani entrepreneurs to establish industry on ownership basis or through joint venture with Pakistani business people,” the state-run media said. 

Separately, the minister met Wu Fulin, chairman of China’s EXIM bank to discuss its long-standing cooperation with Pakistan and the bank’s interest in conducting future investments in the South Asian country.

“Ishaq Dar particularly noted the stellar performance of the Pakistan Stock Exchange and renewed confidence of international investors in Pakistan’s economy,” Radio Pakistan said. 

Dar invited the bank to explore new financing projects in Pakistan in renewable energy, agriculture, industrialization, and industrial sectors. 

Beijing has been one of Islamabad’s most reliable foreign partners in recent years, readily providing financial assistance to bail out its often-struggling neighbor. In July last year, China granted Pakistan a two-year rollover on a $2.4 billion loan, giving the debt-saddled nation much-needed breathing space as it tackled a balance-of-payments crisis.

China has invested over $65 billion in energy and infrastructure projects as part of the China-Pakistan Economic Corridor (CPEC). The project is part of President Xi Jinping’s ambitious Belt and Road Initiative. CPEC is designed to provide China with a shorter and safer trading route to the Middle East and beyond through Pakistan.

Dar’s visit comes amid Pakistan’s recent push for foreign investment, with Islamabad seeing a flurry of high-level exchanges from diplomats and business delegations in recent weeks from Saudi Arabia, Japan, Azerbaijan, Qatar and other countries. 

Prime Minister Shehbaz Sharif has vowed to rid the country of its chronic macroeconomic crisis through foreign investment and efficient handling of the economy. 


Pakistan court asks defense secretary to present report on Kashmiri poet’s ‘abduction’

Updated 53 min 41 sec ago
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Pakistan court asks defense secretary to present report on Kashmiri poet’s ‘abduction’

  • Ahmed Farhad Shah, poet and journalist from Azad Kashmir, went missing from his Islamabad residence on Tuesday night 
  • Shah’s recent social media posts were highly critical of Pakistan’s powerful military and government in backdrop of Azad Kashmir protests

ISLAMABAD: The Islamabad High Court (IHC) on Thursday asked the defense secretary to present a report on the “abduction” of a poet and journalist from Azad Kashmir Ahmed Farhad Shah allegedly by Pakistan’s intelligence agencies, local media widely reported. 

Shah, who had taken to social media in recent days to criticize Pakistan’s powerful military for the recent inflation protests in Azad Kashmir in which three people were killed, went missing from his Islamabad residence on Tuesday night. 

Shah’s wife Ain Naqvi filed a petition at the IHC on Tuesday against her husband’s alleged abduction, requesting for his recovery. She urged the IHC to identify, investigate and prosecute those responsible for his disappearance.

Shah’s wife was represented in court on Thursday by lawyers Imaan Zainab Mazari and Hadi Ali Chatha while Senior Superintendent of Police Jameel Zafar, Assistant Attorney General Usman Rasool Ghuman and other officials were also present, Pakistani newspaper Dawn reported. 

“At this stage, learned counsel for petitioner contends that petitioner has specifically nominated Inter-Services Intelligence in abduction,” Dawn reported, quoting a copy of the order issued by Justice Mohsin Akhtar Kayani. 

“Therefore, secretary Ministry of Defense is directed to submit a concize report after seeking report from relevant quarters of Inter-Services Intelligence, as well as from Military Intelligence, with an explanation as to how and under what circumstances the detenu has been kidnapped and abducted from Islamabad Capital Territory, on the next date of hearing,” the order read. 

The hearing was then adjourned till Monday. 

Rights organizations have accused Pakistan’s military and intelligence agencies of illegally detaining and torturing dissenters without any explanation. Pakistan’s military and intelligence agencies deny they carry out enforced disappearances.

Pakistan Peoples Party (PPP) politician Mustafa Nawaz Khokhar appreciated the court for “thundering” for Shah’s recovery and summoning the defense secretary to the next hearing. 

“Glad to see the court taking a categorical position and wishing @ImaanZHazir & his family the best,” Khokhar wrote on social media platform X. 


Pakistan PM forms committee to probe fault in Neelum-Jhelum hydropower project

Updated 16 May 2024
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Pakistan PM forms committee to probe fault in Neelum-Jhelum hydropower project

  • Power generation at Neelum-Jhelum project was suspended earlier this month due to a technical fault 
  • PM Sharif wants third-party experts to probe matter, says delay in findings of inquiry will not be tolerated

ISLAMABAD: Prime Minister Shehbaz Sharif formed a cabinet committee on Thursday to probe a technical fault in the 969MW Neelum-Jhelum hydropower project, which was shut down earlier this month after a problem was detected in its head race tunnel.

Located on River Neelum in Azad Kashmir, the project generates 5.15 billion units of power annually but has faced several problems over the years. The project first shut down in 2022 after a fault was detected in its head race tunnel but was later restored after a year in September 2023. The same problem was detected in April 2024 and power generation was suspended again earlier this month. 

Sharif called for an urgent probe into the matter when he visited the project site during his day-long visit to Azad Kashmir, a statement from the Prime Minister’s Office (PMO) said. 

The prime minister expressed his displeasure that the inquiry’s findings were still not finalized, directing officials to submit a report on the matter within days and restore power generation after repair work was done as early as possible.

“I am very much clear. I need a thorough probe into whether lapses were in the design or in the construction and the responsibility should be fixed,” Sharif was quoted as saying by the PMO.

“No more delays will be acceptable.”

Sharif lamented that $5 billion was spent on the project despite its initial cost being estimated at $40 million, adding that it was unfortunate that the project was still facing technical issues. 

The prime minister described the Neelum-Jhelum project as one of “national significance” in the power sector, saying it was constructed at a huge cost and must remain functional for decades.

He directed that the inquiry must be carried out by third-party experts and not by the designer or contractor of the project.

“If a mistake has been made and someone has committed an excess, then they will have to pay the fine,” Sharif said. “This is the trust of the nation, we will have to answer to them.”


Pakistan says will withdraw tax exemptions for industries in former tribal regions

Updated 46 min 4 sec ago
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Pakistan says will withdraw tax exemptions for industries in former tribal regions

  • Tax exemptions, duty concessions approved in 2018 for FATA and PATA set to expire on June 30
  • Finance Minister Aurangzeb says business communities across country want equitable conditions

KARACHI: Pakistan’s government will not extend the preferential tax treatment for the erstwhile Federally Administered Tribal Areas (FATA) and the Provincially Administered Tribal Areas (PATA), Finance Minister Muhammad Aurangzeb said on Thursday, saying that business communities across the country were demanding equitable conditions for industries nationwide. 

Pakistan approved tax exemptions for erstwhile FATA, tribal areas in northwestern Pakistan which were merged with the Khyber Pakhtunkhwa (KP) province, in 2018. The exemptions were also extended to PATA, regions within KP which are administered by the provincial government due to their historical and cultural significance. 

The exemptions were extended till January 2023 but were granted another extension for one year. They are now set to expire on June 30, 2024. 

KP lawmakers this week demanded the government extend the incentives for the regions, saying that many princely states in northwestern Pakistan decided to join the country after independence when they were promised tax exemptions. 

“These exemptions are set to expire on June 30 this year by operation of law,” Aurangzeb said during a session of the National Assembly. He was responding to a call attention notice on the withdrawal of tax exemptions and concessions in former FATA and PATA areas. 

He clarified that the government is not “proposing any new legislation” to extend the tax exemptions. 

“The exemptions at that time were given for sales and income tax to integrate these areas into the mainstream economy,” the finance minister explained. He added that business communities, throughout their interactions with the government, were demanding equitable conditions for industries across the country. 

The exemptions were granted to industrial units of iron/steel, plastics, ghee, textile and other sectors and industries located in former FATA and PATA areas. 

Aurangzeb said business delegations from across Pakistan were seeking tax exemptions in line with those offered to ex-FATA and PATA. 

“Since the past few days various chambers have been coming in including steel, fabric, tinplate, oil, tea, and ghee,” Aurangzeb said. “They all are consistently asking about preferential tax treatment.”

Former National Assembly Speaker Asad Qaiser last week urged the federal government to extend the exemptions till 2028. He had argued that the withdrawal of tax exemptions would adversely impact industrial growth and employment in the areas. 

Some areas of northwestern Pakistan, including Malakand division, have been observing shutter-down strike for the past few days against the government’s decision to bring PATA under the tax net. 
 


Edgbaston Stadium to transform into ‘Fan Park’ for India-Pakistan T20 World Cup clash

Updated 16 May 2024
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Edgbaston Stadium to transform into ‘Fan Park’ for India-Pakistan T20 World Cup clash

  • Edgbaston Stadium to live stream India-Pakistan T20 World Cup clash on June 9 for thousands of fans on a giant screen 
  • Millions across the world are expected to tune in on June 9 to watch cricket’s most fiercest rivalry take centerstage in New York

ISLAMABAD: England’s famous Edgbaston Stadium will transform into a “huge Fan Park” on June 9 where thousands of spectators from India and Pakistan will watch their teams battle it out in New York in a T20 World Cup clash, the Warwickshire County Club said this week. 

The June 9 T20 World Cup clash in New York between arch-rivals India and Pakistan is one of the most anticipated cricket matches this year. Millions are expected to tune in worldwide to watch one of the sports’ fiercest rivalries take centerstage in New York. 

The Edgbaston Stadium, one of the leading venues in world cricket, has been the home of Warwickshire County Cricket Club since 1885. For over 100 years, it has hosted first-class and international cricket in Birmingham. 

Warwickshire County Club announced on Wednesday that over 8,000 fans are expected to gather at the Edgbaston Stadium to catch the action live on a giant screen. 

“For the first time ever the ICC are giving UK fans an opportunity to watch it live from Edgbaston Stadium where the piazza will be turned into a family festival of cricket,” Warwickshire County Club said in a press release. 

“Fans will be able to watch the action on a big screen and enjoy the build-up as comedian and cricket commentator Aatif Nawaz takes to the stage alongside former India and Pakistan players.”

Edgbaston Chief Executive Stuart Cain said the stadium was the only venue in England chosen by the ICC as a T20 World Cup fan zone, terming the development as “amazing.”

“It’s an opportunity for our local communities to really feel part of the T20 World Cup experience and I’m sure it will be a fantastic occasion,” Cain said.

“Pakistan and India fans generated an electric atmosphere here in the 2019 Cricket World Cup and I’ve no doubt we can get close to replicating that in the Fan Zone.”

Apart from watching the match on the large screen with live commentary, fans will also be able to access a large family picnic area with activities including cricket skill challenges and cultural performances from both Indian and Pakistan communities, the press release said. 

“Fan parks are an important part of bringing World Cups to more people across the globe,” ICC’s Head of Events Chris Tetley said. 

“I am sure there will be a great atmosphere on the day and based on previous India and Pakistan matches that have taken place at Edgbaston it will be an occasion not to be missed.”

Gates are scheduled to open for fans at 1:00 p.m. GMT before the live feed of the match starts at 3:0 p.m. GMT.

Fans can buy tickets at t20worldcupfanpark.edgbaston.com.