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Pakistan to award gas pipeline contracts to Russia

in International Business

Pakistan to award gas pipeline contracts to Russia

 Pakistan agreed to award Pakistan-Iran and Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline projects to Russia without any bidding process.

The agreement will also extend financial assistance, but the amount is not indicated yet.

The contract is dealt on government-to-government basis only. Private Russian firms will not be granted any role.

“Pakistan’s government will ask the cabinet to waive public procurement rules for award of pipeline contracts to Russia,” said a participant of the meeting of Pak-Russia Joint Working Group on Energy.

The two sides would sign a memorandum of understanding (MoU) in next two to three months to move ahead with the projects, he said. Third meeting of the joint working group will be held in Moscow in 2013.

Russia has also expressed willingness to cooperate in power import project, importing 1,000 megawatts of electricity from Central Asia. The World Bank and Islamic Development Bank have committed financial support for the power import project.

The Iranian government had proposed to pay USD 250 million to help fund the project, whereas Pakistan needed around USD 500 to finance the pipeline. Iran says it started work on the pipeline up to the Pakistani border.

Western governments and the Asian Development Bank have lined up behind TAPI as an expression of opposition to the Iranian pipeline. Security in Afghanistan, however, could complicate the Western-backed project.

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