Wanted: consultant for Iran to India gas pipeline

Vol 9, PW 8 (28 Jul 05) People & Policy

GAIL wants to hire a financial consultant for advice on how to proceed with the gas pipeline from Iran, regardless of political developments in Tehran.

On 19th July, the GAIL board agreed to begin the search, under clear instructions from the oil ministry. GAIL has been appointed by the government to oversee the project and hopes to issue a tender for the consultant in the coming weeks.

Those submitting bids must make a presentation to a team lead by oil secretary Sushil Tripathi. A selection committee will most likely choose the winner by the end of August.

We have set ourselves a very tight schedule for this project, reveals a source. Whoever wins will be asked to prepare a broad project structure for Indias participation in the venture.

Included in the mandate will be an estimate of how much piped Iranian gas will cost at the Indian border; the financial and legal arrangements needed to ensure a safe and secure environment for its passage; and an analysis of the risk to supplies from terrorist attacks by Islamic militants in Pakistan. GAIL will complement the report with a separate report on the technical requirements of the pipeline.

On 11th July, Indian and Pakistani teams meeting in Delhi agreed to appoint separate financial consultants for the project. If necessary, the financial consultants of both countries will meet with each other to share information on the project, we learn.

India wants the consultants report to help decide if its interest is best served by participation in pipeline construction or by restricting itself to buying gas at the border. If we participate in the project we should be assured of safety and security of gas supplies and its economic viability, adds a source.

There are more advantages in being a participant than just a buyer. If the financial consultant recommends Indias participation and manages to convince the oil ministry, then all efforts will be made to get cabinet approval by the end of October or early November.