Pakistan says exploring ‘creative options’ to complete Iran gas pipeline while avoiding sanctions

An Iranian worker stands in front of a section of a pipeline 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 09 August 2023
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Pakistan says exploring ‘creative options’ to complete Iran gas pipeline while avoiding sanctions

  • Ten years ago, Pakistan asked Iran to suspend its obligations under Gas Sales and Purchase Agreement
  • Iran rejected Force Majeure notice, gave Pakistan two five-year extensions, last one expires on March 2024

ISLAMABAD: Pakistan has not scrapped a multi-billion-dollar gas pipeline project with Iran but was trying to come up with “creative solutions” to ensure the project could be completed while avoiding US sanctions, petroleum minister Dr. Musadik Malik said on Wednesday.

In written testimony to parliament last week, Malik said Pakistan had issued a Force Majeure and Excusing Event notice to Iran under the Gas Sales and Purchase Agreement (GSPA), under which Pakistan’s obligations under the GSPA would be suspended as it was unable to fulfil its part of the bargain due to US sanctions, thus pushing the project's completion by more than a decade. 

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

The notice, issued ten years ago, was rejected by Iran. Pakistan then negotiated extensions and got two of five years each. The last extension ends in March 2024.

“We have not scrapped the project, rather are moving forward very aggressively,” Malik told reporters in Islamabad. “I just want to clarify that we basically had done Force Majeure about 10 years ago. Because of the [US] sanctions, we could not start or initiate the pipeline but the Iranian side did not agree on it [Force Majeure notice … We got two waivers of 5 years each, so we got a waiver of 10 years to negotiate further.”

Discussions to build the 2,775-km pipeline began in 1995, but it has yet to be completed mainly due to a 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 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. Construction would use a segmented approach, where Iran would lay down the pipeline on its side, and Pakistan was supposed to reciprocate on its territory.

Malik said both countries were trying to come up with a solution to the problem, complicated by the fact that Iran faced sanctions from both the US and the United Nations. He said Islamabad was using “creative thinking” and all legal instruments at its disposal to ensure Pakistan was not slapped with sanctions in going ahead with the pipeline project.

“We are trying to come up with creative solutions,” Malik said. “Our perspective is very clear, that we need that [Iranian] gas but do not want to be sanctioned.”

Azerbaijan, Türkiye, Iraq, and other countries importing oil products from Iran had received waivers but Pakistan was yet to get one, the minister added.

Replying to a question about possible penalties if Pakistan missed the March 2024 deadline, the minister said penalties would apply only if one of the parties to the contract took the matter to court.

“This is a take-and-pay payment and the penalty will be decided by the court if any side takes the issue to the litigation,” he said, “and we are trying that the issue should not go to that stage.”


Pakistan’s benchmark index posts nearly 100% growth in a year to hit all-time high

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Pakistan’s benchmark index posts nearly 100% growth in a year to hit all-time high

  • Benchmark KSE 100 index hits all-time high at 80,059.87 level during intraday trading
  • Analysts say surge due to investors’ optimism about Pakistan securing another IMF loan

KARACHI: Pakistan’s key stock index hit an all-time high of 80,000 points on Friday, with data showing the benchmark index posted a growth of nearly 100 percent in a year, as analysts attributed the recent surge to optimistic investors confident Islamabad will extract another bailout package from the International Monetary Fund (IMF).
The benchmark KSE 100 index crossed the key psychological barrier of 80,000 points to hit an all-time high of 80,059.87 points. This is an almost 100 percent increase recorded in the benchmark index since June 21, 2023.
However, following the profit-taking at higher levels— a situation where buyers sell shares at higher prices to gain maximum profit— the index dropped to 78,169 points during trading and closed at 78,810.49 points.
The index figure at the close shows that the benchmark has posted a growth of 96 percent in a year, according to the Pakistan Stock Exchange’s (PSX) data.
“Positive sentiments, led by a tax-laden budget which investors feel will help in getting IMF’s long-term loan, have tossed the index above the 80,000 level which was 40,000 a year back,” Muhammad Sohail, CEO of Topline Securities, told Arab News.
Pakistan’s Finance Minister Muhammad Aurangzeb presented the $67.76 billion federal budget for the fiscal year 2024-25 in parliament on June 12. Analysts expect the budget will play a pivotal role in Pakistan’s negotiations with the IMF to unlock yet another loan from the international lender.
Islamabad has set an ambitious tax revenue generation target of about Rs13 trillion ($46.55 billion) for the year fiscal year 2025 in the budget. The tax collection target has been increased more than 40 percent from the target for the current fiscal year, which ends on June 30.
Pakistan equity investors also celebrated the government’s move to refrain from an anticipated increase in capital gains tax (CGT) and tax on dividend income. In addition, the taxes imposed on the real estate sector will also make the stock market an attractive destination for investment, analysts said.
“Before the budget, there was a rumor in the Pakistan stock market that capital gains tax and tax on dividends is going to be increased,” Shehryar Butt, portfolio manager at Darson Securities said. “But after the budget, those taxes were not imposed. That was positive for the market.”
Butt said the budget presented by the incumbent government seemed to be as per the IMF’s directions and expectations. 
“It is very likely that Pakistan will get a longer program of IMF after presentation of the budget and it has also been marked by international rating agencies including Fitch,” Butt noted, adding that global financial institutions are optimistic about Pakistan achieving its revenue collection target.
Analysts hope the stock market will continue to perform strongly and the KSE 100 index will add another 10,000 points in the coming days.
“Factors that would support the bullish sentiments at the stock market in coming days include inflation and the monetary policy easing,” Tahir Abbas, head of research at Arif Habib Limited, said.
Abbas said average annual inflation is expected to be around 12-12.5 percent while interest rates are expected to decline from the current 20.5 percent figure to around 16 percent in a year.
“Based on these factors we expect that the KSE 100 index would hover around the 88,000 level by the end current year,” he said.


Pakistan’s Punjab bans public gatherings as ex-PM Khan’s party calls for protests

Updated 21 June 2024
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Pakistan’s Punjab bans public gatherings as ex-PM Khan’s party calls for protests

  • Khan’s Pakistan Tehreek-e-Insaf party called for nationwide protests on Friday to demand his release from prison
  • Punjab government imposes ban on public gatherings, rallies, protests, sit-ins and demonstrations for seven days

ISLAMABAD: Pakistan’s Punjab government imposed a ban on all kinds of public gatherings throughout the province on Friday after jailed former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party called for nationwide protests to demand his release.
In a video statement earlier this week, PTI leader and former National Assembly speaker Asad Qaiser urged Khan supporters to come out on the streets across the nation on Friday to demand Khan’s release from prison.
The former prime minister has been in jail since August 2023 after he was convicted by a local court on corruption charges. Khan denies the allegations, saying they are politically motivated to keep him and the PTI away from Pakistani politics.
“It has been observed that in view of the prevailing law and order situation and security threats, any gathering/ assembly is likely to provide soft targets to terrorists and miscreants,” a notification issued by the Punjab Home Department said.
“Which not only pose serious security threats but is also likely to cause threat to public at peace and order as well as inconvenience to public at large.”
The notification said the government was imposing Section 144, which empowers the administration to ban any activity in the general interest of the public for a specific time period, across Punjab for a period of seven days.
The notification said assemblies, gatherings, sit-ins, rallies, processions, demonstrations, protests and other such activities have been prohibited across the province effective immediately.
PTI leader Raoof Hasan criticized Punjab government’s “shameful” decision in a post on social media platform X.
“It reflects how mortified they are of the person of @ImranKhanPTI & his vision of an independent & sovereign Pakistan where its people would become the true arbiters of their fate,” Hasan wrote.
Khan’s tensions with the government and Pakistan’s powerful military came to a head on May 9 2023 when angry supporters took to the streets and attacked government and military installations following his brief detention in a land corruption case.
The move sparked a nationwide crackdown launched by the government against Khan’s party which saw several PTI leaders and supporters rounded up in jails. Many Khan aides announced parting ways with him following the crackdown on his party. Pakistan’s military announced it would try those involved in the May 9 violence in military courts.
Khan initially said the protests were a natural reaction by his supporters but later distanced himself from it, blaming Pakistan’s intelligence agencies for instigating the riots. Pakistan’s military and government rubbished his allegations.


Senior Chinese official says Pakistan’s security challenges undermining investor confidence

Updated 21 June 2024
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Senior Chinese official says Pakistan’s security challenges undermining investor confidence

  • Liu Jianchao raises concern over the issue after several Chinese workers were targeted by militants in the country
  • The Chinese official also asks political parties to work together and deal with complex challenges facing Pakistan

ISLAMABAD: A senior Chinese official on Friday identified Pakistan’s internal security deficit as a major challenge undermining investor confidence while addressing the 3rd Meeting of the Pakistan-China Joint Consultative Mechanism (JCM), which brought together representatives of all major Pakistani political parties.
Liu Jianchao, a prominent Chinese political figure, serves as the Minister of the International Liaison Department of the Communist Party of China, a key position that involves managing relationships with various political organizations around the world.
He arrived in Pakistan on Thursday night to co-chair the JCM meeting, focusing on the progress and future direction of the China-Pakistan Economic Corridor (CPEC).
Liu voiced concern over Pakistan’s internal security situation, as militant groups in the region have targeted Chinese nationals working on various CPEC projects around the country in recent years.
“We need to improve security and the business environment,” he said while addressing the forum. “Security threats are the main hazards to CPEC cooperation. As people often say, confidence is more precious than gold. In case of Pakistan, the primary factor shaking the confidence of Chinese investors is the security situation.”
“Without security, the business environment cannot really improve,” he continued, adding this may undermine development in the longer run.

Pakistan's Deputy Prime Minister Ishaq Dar (right) meets a senior Chinese Communist Party leader Liu Jianchao in Islamabad, Pakistan on June 21, 2024. (@ForeignOfficePk/X)

Earlier, Pakistan’s Deputy Prime Minister Ishaq Dar told the meeting the CPEC enjoyed full political support in his country while members of several rival political factions sat around the conference table.
However, the Chinese official also urged Pakistani politicians to work together to deal with the complex challenges facing the country.
“In the turbulent world of rising uncertainties, stability within a country is essential for the development of that country,” he noted. “Faced with complex internal and external challenges, Pakistan is navigating carefully the turbulent rivers and treacherous shores. Only when all political parties in a country join hands to ensure political and social stability can there be sustainable development.”
Liu also mentioned the “Western social media,” saying it had a huge impact on younger generation and was eroding the foundations of China-Pakistan friendship.
He pointed out the strategic nature of relationship between the two countries had yet to translate into mutual understanding and affinity between their people, emphasizing exchange programs on multiple levels to foster greater friendship.
The Chinese official said his country wanted to upgrade CPEC and take it to the next level of development to benefit the people of the region.
He praised Pakistani law enforcement agencies for capturing suspects who have “so badly sabotaged” the security situation in the country.
He also expressed optimism that the two sides would continue to cooperate with each other, adding that Pakistan would remain a major destination for Chinese businesses and investors in the coming years.
Liu’s trip to Islamabad comes only days after Prime Minister Shehbaz Sharif concluded his five-day visit to China where he met with the top political leadership along with a number of investors and representatives of top technology companies.
The two countries principally agreed to usher CPEC into its second phase, expanding beyond the initial focus on infrastructure and energy to include broader economic and social development goals.
The new phase emphasizes rural revitalization, agricultural modernization, industrialization and green development, among other things.


Balochistan to present budget 2024-25 today

Updated 21 June 2024
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Balochistan to present budget 2024-25 today

  • Provincial government announced last week that budget layout will exceed Rs850 billion
  • Balochistan ministers also announced increase in government salaries in FY25 budget 

ISLAMABAD: The government in Pakistan’s southwestern Balochistan province is set to present its annual financial budget 2024-25 today, Friday, state-run media confirmed.
State broadcaster Radio Pakistan said Balochistan Finance Minister Mir Shoaib Nosherwani will present the budgetary proposals in the provincial assembly at 4:00 p.m.
“Balochistan budget for next fiscal year will be presented in provincial assembly in Quetta on Friday,” Radio Pakistan said.
Speaking at a joint press conference in Quetta on Sunday, Balochistan’s Planning and Development Minister Zahoor Ahmed Buledi and Finance Minister Nosherwani announced that employee salaries would see a 25 percent increase for grades 1 to 16, a 20 percent increase for grades 17 to 22, and a 15 percent increase in pensions in the upcoming budget.
Both ministers said the budget layout would exceed Rs850 billion while the federal budget allocated Rs58 billion for the southwestern province under the Public Sector Development Programme (PSDP) head for the upcoming fiscal year.
Pakistan’s restive Balochistan province, which shares porous borders with Afghanistan and Iran, has been wracked by an insurgency launched by ethnic Baloch militants for decades.
Baloch nationalists have long accused the Pakistani government of monopolizing profits from Balochistan’s abundant natural resources, saying it has led to political marginalization and economic exploitation.
However, Pakistani administrations have denied these allegations, citing several development initiatives launched in the province to improve local living conditions.


PIA aims to repatriate over 35,000 pilgrims from Saudi Arabia following Hajj

Updated 21 June 2024
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PIA aims to repatriate over 35,000 pilgrims from Saudi Arabia following Hajj

  • The national airline is among several aviation services working to bring Pakistani pilgrims back to their homeland
  • PIA says it will operate its special flights to Peshawar, Islamabad, Sialkot, Lahore, Multan and Karachi until July 21

ISLAMABAD: Pakistan’s national air carrier announced on Friday it would bring back more than 35,000 pilgrims from Saudi Arabia via 171 flights after transporting 325 devotees to Lahore this afternoon who had performed the annual Hajj pilgrimage.

Pakistan launched its post-Hajj flight operation on Thursday, bringing back 1,200 pilgrims through seven flights to four different cities in the country.

The authorities have announced the continuation of special flights to repatriate 70,000 pilgrims on the government Hajj scheme until July 21.

Pakistan International Airlines (PIA) is among several aviation services working to bring Pakistani pilgrims back to their homeland.

“PIA’s post-Hajj flight PK 764 from Jeddah to Lahore arrived this afternoon carrying 325 pilgrims,” the airlines said in a statement. “The pilgrims were adorned with garlands of flowers.”

“PIA will bring back more than 35,000 pilgrims from Saudi Arabia through 171 flights,” it added. “Under the government Hajj scheme, approximately 19,500 pilgrims, under the private Hajj scheme about 14,900, and around 630 Hajj assistants will be brought back to Pakistan.”

Pakistan’s national airlines will operate post-Hajj flights to Peshawar, Islamabad, Sialkot, Lahore, Multan and Karachi.

PIA announced pilgrims from Sukkur and Quetta would travel to their cities via Karachi.

The airlines said it would conclude its post-Hajj flight operation on July 21.