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[Naresh]

<b>US lures Pakistan away from gasline</b>

ISLAMABAD – <b>Asking to stay away from Iranian gas pipeline for enhanced American energy cooperation, the Washington left Islamabad in a fix on Monday to choose between nearest available gas line or help line from US in tackling the ever-growing energy crisis.

“In case Pakistan withdraws from the primary partnership of transnational Iran-Pakistan-India (IPI) Gas Pipeline project, it would also get the American support to get funds committed by the Friends of Democratic Pakistan (FoDP),” sources told TheNation here on Monday.</b>

According to the sources, President Obama’s Special Envoy for Afghanistan and Pakistan Richard Holbrooke and Finance Minister Shaukat Tarin tossed these options during their meeting here on Monday. US High Commissioner Anne W Patterson flanked the special envoy while State Minister for Finance Hina Rabbani Khar was there to reinforce the Pakistani side.

Meanwhile, an official handout stated that the federal minister briefed Holbrooke about the state of Pakistani economy, particularly the issues related to energy crisis.

Holbrooke, while appreciating the signs of improvement of Pakistan’s economy assured US government’s full cooperation in resolving Pakistan’s economic issues, including the energy crisis.

Earlier, the sources said that the gas pipeline was not only sufficient to fuel power generation to tune of 4000MW <b>in addition to the potential of earning sizeable transit fee in case India and China tended to join the transnational so-called peace pipeline. Of late the Pakistani intelligence agencies have also reportedly opposed the gas pipeline project from Iran that they believe entails security hazards. The government consequently has decided to get the parliamentary node to the project, but so far it has been dilly-dallying on bringing the IPI to the Parliament. At the same time, the Americans more than once had declared unequivocally their opposition to the project initiating from Iran, the sources said.</b>

On the other hand, the sources said the American energy cooperation meant mere financial support to either import liquefied natural gas on short-term basis and fetch a high voltage transmission line from Tajikistan as a long-term solution. Not only the construction of power transmission line would require reasonable time frame <b>but also security assurance especially when it passed through the Afghan territories,</b> the sources added.

“There was also a possibility of American financial as well as technical support in the Thar Coal Development project,” the sources mentioned.

Reuters/APP/Online add : Pakistan has told the United States it hopes to ease power shortages by renting electricity-generating plants over the next three to five years but wants Washington’s backing in a longer-term upgrade and diversification of the country’s antiquated power sector.

US envoy Holbrooke said the United States was considering funding projects to upgrade Pakistan’s antiquated power sector, but played down the speed at which assistance would materialise and crippling electricity shortages would end.

He said the US would provide $1 billion aid to Pakistan and also pledged more aid to the country. He said the meeting of Friends of Democratic Pakistan (FoDP) would improve Pakistan’s trade with the world.

“This problem’s been building for 25 years. We need time to work out what makes sense,” he said, <b>adding that US commitments “don’t mean electricity in Karachi next week”.</b>

The meeting discussed issues related to Malakand Pilot Project, energy crisis and meeting of Friends of Democratic Pakistan (FoDP) to be held in Istanbul on August 25.

Tarin said the government would rent electricity-generating plants over the next three to five years to fill the gap until large-scale energy projects come online.

Tarin asked the US to help Pakistan in solving its energy crisis on permanent basis and to release Coalition Support Fund soon.

Holbrooke, while appreciating the signs of improvement of Pakistan’s economy, assured of US government’s full cooperation in resolving Pakistan’s economic issues including the energy crisis.

Minister of State for Finance and Economic Affairs Hina Rabbani Khar and US Ambassador to Pakistan Anne W Patterson were also present during the meeting.

Finance Minister Tarin said after talks with Holbrooke that Washington could assist Islamabad by providing financial guarantees to encourage investment in large-scale energy projects that would replace the temporary, rental plants.

“We’re looking at the energy sector in an effort to be responsive to a critical issue facing the Pakistani people,” said Mary Beth Goodman, Holbrooke’s economic adviser.

“The energy shortfalls are not only impacting the border areas but the entire country, without regard to demographic or geographic boundaries.”

To ease power shortages in the short term, Tarin said the International Monetary Fund (IMF) had approved subsidy on electricity on the directives of the US. He said Pakistan was trying to overcome short-term electricity problems through rental power plants as it is facing shortage of 3,500 MW.

He said rental power plants would be used to generate up to 3,500 megawatts of electricity. He said the rentals would be used for the next three to five years.

Speaking to a small group of reporters travelling with Holbrooke, Tarin said Pakistan would not need US cash assistance to run the temporary plants.

“We can do it ourselves,” he said, adding that he expected the local banking sector to step forward with financing.

But Tarin said the rental plants would be replaced in three to five years, and that Pakistan was looking for Washington’s help in encouraging private investment in hydro-electric, coal, wind and solar projects.

“That is the mix we want and, frankly, that’s a long term kind of solution,” he said. “And if the US can help us and showcase our case in the United States, I’m sure that we’ll get investments.”

<b>Tarin described Pakistan’s current reliance on gas-fired plants as “totally screwed up”.

“We don’t have either gas or petrol. We have to import them,” he said.</b>

Tarin said the current crisis was the result of a lack of planning. “We sat on it for 10 years. If we had not sat on it for 10 years, when our economy was growing at 7 per cent, we wouldn’t have any of this mess. But that’s history.”

The Finance Minister asked Washington to allow free access to US markets.

He said the FoDP would only discuss reconstruction of Malakand Division.

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