"Will they smoke the pipe(line) of peace?"

The Director-General of TERI R K Pachauri takes credit - along with former deputy Iranian foreign minister Ali Shams Ardekani - for coming up with the idea of a gas pipeline from Iran through Pakistan to India. That was a decade ago. Now, the issue is again in the pipeline and may well figure in the Agra Summit. Pachauri spoke to Sunit Arora and N Vidyasagar on what needs to be done to bring the pipeline project into action: How do you think the Agra Summit will treat the issue of the Indo-Iran gas pipeline? It would surely come up for discussion. There will be expression of deep interest on both sides. There has to be some assurance on the part of the Pakistani president that they are prepared to bend backwards to address India's security concerns. As a result, two governments could agree to set up a working group. We have recently teamed up with a Pakistani institute to study all aspects of the proposed Indo-Iran gas pipeline project. But it is not a government project. What are the central issues to take this forward? We cannot get the gas from Iran without having Pakistan in the triangular arrangement. We have to have some arrangement with them whereby they are also liable to anything that goes wrong. I would see that as a next stage. And that is where some permanent mechanism for pursuing of dialogue would be necessary. There has to be a triangular arrangement. My concern is we are not resolving this issue at all. The issue is dragging on. Getting gas from Iran would be 50 per cent cheaper. Is there any feedback from the governments on your feasibility study? We have not formally approached the governments. But I have talked to very influential people in the Indian government in taking a right step. We have done a lot of work on how the security concerns can be addressed. What has caused the Indian government's change in stance? There is no denial in the fact that we needed a lot of gas in this country. The pressure of demand obviously requires India to take a far more positive approach. My view --a private view --is that government realises that something like this can bring about a sea change in political dynamics and the political relations between the two countries. It signals totally a new era. In the case of Pakistan, right from Benazir Bhutto to Nawaz Sharif and Pervez Musharraf there has been strong political interest for this pipeline. They also see the revenues. What are the exact revenues Pakistan can earn from this oil transit? My estimate is around $400 million to $500 million per year for the size of pipe we are talking about. Sure, it's a lot of money. I think the financial feasibility is straight forward because the terrain is not difficult. The cost of pipeline is pretty well-known. And there are also some norms in terms of transit fees. On the other hand, a deep-sea pipeline is far more insecure than something which is transparent and comes over land route. Is there a broad consensus that the only option now is land route? There is great consensus. Within the Indian government there were sections of government totally opposed to the over-land option. They have at least come around to accept that it is worth looking at. I think the strength and the numbers behind that feeling are not strong as it used to be. I have a feeling that there is a pretty good chance of the pipeline happening. If we assume that a working group is formed, what is the logical time- frame for this to go forward? The way I would like to see it happen is while the feasibility study is on, we have to put together the financial, political, legal and constitutional framework. The point is something like this doesn't get done in a fortnight. You need at least two to three years for feasibility study to be over, the contractual arrangements finalised and financing tied-up. I would feel happy if Iranian gas flows to India in a seven to eight year time-frame. What if something goes wrong... There is a danger of terrorist action. But the way one looks at is Pakistan army is going to remain strong quite some time. With some sense you have to have some measure of confidence whole system working. If Pakistan slips into chaos, there is a danger. If there is some problem on Pakistani territory we have such a huge penalty quite apart from the part that payments are not made for the gas. In the absence of domestic infrastructure, and power reforms, is India ready for gas? The kind of things that this gas will go into fertiliser, petrochemicals and power generations. You can imagine the problem of moving huge quantity of coal from eastern and south eastern India. And the other thing which you cannot rule out is the domestic use of gas in large cities. We are all dependent on LPG. LPG is an expensive and lousy option. For a concentrated population it is better to pipe that supply.