Pakistan Economy - News & Updates - Archive

[Neo]

EDF approves Rs243m for projects to enhance exports ​

Friday, October 10, 2008

ISLAMABAD: The Export Development Fund (EDF) of the commerce ministry on Thursday approved Rs243 million for various projects to enhance exports, says an official announcement.

The projects include construction of Pakistan Institute of Fashion & Design at Johar Town, Lahore (Rs190 million) and budget for the Horticulture Development and Export Board, Lahore for 2007-08 and 2008-09 (Rs48.478 million), the announcement added.

The 53rd meeting of the EDF Board of Administrators was held here in the committee room of the Ministry of Commerce under the chairmanship of Ch Ahmed Mukhtar, Federal Minister for Defence, Commerce and Textile Industry.

The participants of the meeting included Senator Ilyas Ahmad Bilour, secretaries commerce and textile industry, Chief Executive Trade Development Authority of Pakistan (TDAP), Secretary TDAP, representatives of the Ministries of Finance, Food & Agriculture, Industries & Production, State Bank of Pakistan and Federation of Pakistan Chambers of Commerce and Industry, presidents of Karachi Chamber of Commerce & Industry and Sarhad Chamber of Commerce & Industry and chairmen of prominent Trade Associations.

 

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GDP growth may fall to 3.5pc next year: IMF​

ISLAMABAD, Oct 9: Pakistan’s economic growth rate may slip to 3.5 per cent in 2009 as countries in South Asia are not totally immune to the financial crisis in the US and its subsequent fallout, International Monetary Fund data suggest.

Pakistan’s Gross Domestic Product (GDP) is likely to decline to 5.8 per cent this year and to 3.5 per cent next year, said the IMF World Economic Outlook 2008 released ahead of annual meetings of the IMF and the World Bank.

Pakistan recorded a GDP growth of 6.9 per cent in 2006 and 6.4 per cent in 2007.

The GDP rate in South Asia is estimated at 7.6 per cent this year and 6.4 per cent in 2009. The rate was 8.7 per cent in 2007.

Weakening external demand is likely to weigh on exports, but in some cases the impact may be mitigated by still-loose macroeconomic policies and currency depreciation.

“Investment will also moderate, mainly because of deteriorating export prospects. Consumption will ease because of still-high fuel and food prices, although subsidies, which are common in the region, may cushion the impact on purchasing power,” the report said.

The growth rate for 2009 is projected at 6.9 per cent in India, 5.6 per cent in Bangladesh, 5.7 per cent in Bhutan, 5.5 per cent in Nepal and 5.1 per cent in Sri Lanka.

Inflation for 2009 in Pakistan is projected at 23 per cent as against 12 per cent recorded last year.

The average inflation for 2009 in South Asia is projected at 8.8 per cent.

The inflation in India will be 6.7 per cent followed by 10 per cent in Bangladesh.

“Capital flows to some countries have become more volatile, particularly to those running sizable external deficits. Their currencies have come under pressure prompting central banks to intervene in support are India, Pakistan and Vietnam.

“A number of currencies in Africa and South and East Asia (for example, India, Korea, Pakistan, and South Africa) have depreciated over a longer period, in part owing to rising costs of commodity imports and widening current account deficits,” the IMF added.

 

[Neo]

Kohala power project attracts Chinese firm​

ISLAMABAD, Oct 9: A Chinese company has shown interest in investing in the $2 billion Kohala hydro-electric power project in Azad Kashmir.

A five-member delegation of the Sinohydro Corporation called on Minister for Water and Power Raja Pervez Ashraf here on Thursday and said it was keen to invest in the 110 megawatts project.

Mr Ashraf said his ministry would facilitate the company in joining open bidding.

The Chinese firm is involved in the Gomal Zam Dam and Khan Khawar and Dubair hydropower projects.

The proposed plant in Azad Kashmir would be one of the largest hydro-electric power projects in the private sector in South Asia, an official said. It would require a 16kms tunnel, a diversion from Seran village and a powerhouse in Barasala. The project would be linked to the national grid at Rawat near Rawalpindi through a 115kms 500kV transmission line, he said.

He said it was a high risk project and any company venturing to invest there would demand open-minded discussion with the government of Azad Jammu and Kashmir and the Water and Power Development Authority on tariff and other issues.

 

[Neo]

Forex reserves rise to $8.32bn​

KARACHI, Oct 9: Pakistan’s foreign reserves rose $190 million to $8.32 billion in the week that ended on Oct 4 from the previous week, the central bank said on Thursday.

The State Bank of Pakistan said its own reserves rose to $4.87 billion from $4.68 billion previously, while those held by commercial banks were flat at $3.45 billion.

The foreign exchange reserves hit an all-time high of $16.5 billion in October last year, but have been falling since then due to weak economic fundamentals, political uncertainty and security concerns.

ADB on Sept 30 approved a $500 million loan to help Pakistan address the impact of high fuel and food prices on its people and the economy.

The loan may be reflected in the latest figures.

Analysts said the rise can also be attributed to banks being closed from Oct 1 till Oct 4 for Eid holiday.

Pakistan needs up to $3 billion of foreign capital inflows to arrive quickly if it is to meet upcoming debt obligations.

The newly-appointed finance advisor to the prime minister, Shaukat Tarin and central bank governor Shamshad Akhtar left late on Wednesday to attend the annual International Monetary Fund (IMF) meeting in Washington on Oct 13, officials said, though the government has said it is not seeking an IMF support package.

Dealers expect the rupee to remain under pressure due to import payments and lack of foreign inflows.—Reuters

 

[Neo]

Pakistan may seek IMF credit facility​

LAHORE, Oct 9: Pakistan may seek another International Monetary Fund (IMF) credit facility to improve its dwindling foreign currency stocks and cover its increasing current account deficit, officials told Dawn on Thursday.

Until recently the government had consistently been shrugging off reports that it could join a fund programme to salvage the sliding economy.

“Nothing can be ruled out. A low-cost IMF loan is one of the several options being considered by the government,” a senior finance ministry official told this reporter from Islamabad.

“We need dollars to ease pressure on the rupee and restore the investor confidence in our economy and currency, and are exploring various avenues,” he said in reply to a question.

The departure of a delegation, headed by the newly-appointed prime minister’s advisor on finance, Mr Shaukat Tareen, on Wednesday night for Washington for discussions with the IMF and the World Bank on Islamabad’s strategy to get out of its current economic morass has triggered speculations in both the official and business circles that Pakistan may join another fund programme.

The last time the country joined a fund programme – the Poverty Reduction and Growth Facility (PRGF) – of $1.5 billion was in December 2001 for a period of three years.

The arrangement was, however, terminated prematurely because the then government did not feel the need to complete it.

At that time, the government had also stated that it was the last time Pakistan had joined an IMF programme.

But with the country’s foreign currency reserves falling to $8.3 billion from $16.4 billion a year ago and the rupee hitting its historic low in the inter-bank market during the last couple of days, the finance managers appear to be reconsidering seeking a fresh facility from the IMF to cover its immediate foreign exchange needs.

Pakistan is said to be requiring immediate foreign capital inflows – almost all sources of foreign capital inflows have already dried up or slowed down since the beginning of the year – of more than $10 billion to boost the economy over a period of next few months.

“If Pakistan joins the IMF facility, it will not be for shoring up our foreign currency reserves alone. We will be seeking it because the IMF’s decision to support us will send a very positive signal to the world and help restore the investor confidence in our economy and our ability to get out of the present economic mess,” the official said.

 

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‘Pakistan won’t go bankrupt’​

* President Zardari launches Rs 34 billion BISP, says Pakistan ‘not a limited company’
* Vows to wipe out ‘cancer of terrorism’​

ISLAMABAD: Pakistan will not go bankrupt due to the ongoing economic crisis, President Asif Ali Zardari said on Thursday.

“Pakistan is not going to bankrupt. It is not a limited company ... We are negotiating with the international community to address the situation,” Zardari said at the launch of Rs 34 billion Benazir Income Support Programme (BISP) at Aiwan-e-Sadr.

Under the scheme, families with a monthly income of less than Rs 6,000 will be paid Rs 2,000 every two months.

Zardari said he understood there was a sense of depression among people due to the current economic situation, and gave assurances that the government was taking effective measures to address the situation.

Cancer: The president said the government was not afraid of terrorists and that it would wipe out this ‘cancer’ from society.

“We are not afraid of terrorists. The government, the people and myself are all steadfast in our resolve to wipe out this cancer from society.”

He said strong nations handle crisis with courage. He urged people to have faith in the government, which he said was capable of rising to all challenges. He said the Pakistan People’s Party’s stance on the Kashmir issue was unchanged.

Zardari called an in-camera joint session of parliament on the country’s security situation a positive step towards the strengthening of democracy. He also praised ANP President Asfandyar Wali Khan for fighting extremism and terrorism.

Commenting on the BISP, he said the scheme was a step towards the empowerment of women and reducing sufferings of the poorest of the poor. app

 

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1,100 megawatts Kohala hydropower project: Chinese company keen to invest​

ISLAMABAD (October 10 2008): A Chinese company, Sinohydro Corporation, has showed interest in investment in Pakistan by constructing 1100 MW Kohala Hydropower project. The company official said this during a meeting with Minister for Water and Power, Raja Pervez Ashraf here on Thursday.

The company gave a detailed presentation to the minister about their ongoing projects and briefed him on the company's expertise in the construction of hydropower projects. Water and Power Minister said that the government would remove all bottlenecks to facilitate the foreign investors to invest in the water and power sector in Pakistan as there are great opportunities in this sector.

He said that the foreign investment in the hydel power generation will help to meet the country's future power requirements at affordable prices. The Minister also informed the company's delegation that Pakistan was embarking on construction of multipurpose dams, which would meet the power needs on a long term basis.

The delegation also informed that it is working on 156 hydropower projects in various countries of the world. The company is already constructing Gomal Zam dam, Khan Khawar hydropower project and Dubair Khawar hydropower project in Pakistan.

The Minister appreciated their interest of the company to invest in the hydel power generation and said that international consultants have been appointed for detailed engineering, designs and tendering documents for Kohala Hydropower project, which are in final stages.

He expressed the hope that the company would take opportunity to participate in the international competitive bidding to be held for Kohala Hydropower and various other water and power projects. He said that the government will provide complete assistance to the Chinese companies to invest in this sector. He stated that the confidence of the foreign investors would gain new heights and the economy would be made more stable through adopting rational policies to remove all hindrance and bottlenecks in this respect.

The pace of work on various ongoing Wapda projects being constructed by the Sinohydro Corporation was also discussed during the meeting. Adviser to Ministry, Chairman Wapda, Additional Secretary and other senior officials of the Ministry and Wapda were also present. Later, the Minister expressed his deep sorrow and grief over the tragic death of Chinese engineer, who died while working in the Gomal Zam dam project last month.

 

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ADB to provide $2 billion loan for LRTS​

KARACHI (October 10 2008): Asian Development Bank (ADB) has agreed to lend over $2 billion to Pakistan which is considering to introduce Light Rail Transit System (LRTS) in one of its most congested cities, Karachi. According to official sources the regional loaning institution has expressed its willingness to provide Pakistan with a soft loan to be used for development of the mega project.

"ADB has committed to provide us a big loan of over $2 billion for the LRTS project," said an official in Sindh government. They said feasibility study for LRTS would soon be initiated jointly by the Sindh and city governments.

The present Pakistan People's Party-led government is eyeing the proposed light rail system as an effective and practicable way to encourage the masses to prefer public transport as a means of travelling rather than private cars or motorcycles, said the sources.

The new system, they said, would have a subway-like mechanism of stop-by-stop brakes, like most of the developed and some of the developing countries. They said the government was following a comprehensive strategy that includes projects, like Bus Rapid Transit System (BRTS), LRTS and Heavy Rail Transit System to improve the overall transportation system in the metropolis.

The government of Pakistan, they said, was already in talks with ADB for a soft loan worth $600 million to finance the Bogota-like Bus Rapid Transit System in Karachi. The ADB loan for BRTS would also be used for conducting feasibility study for the LRTS, added the sources. "This is the success of Sindh government that the international loaning institutions like ADB is committing such a big loan to us," said the official.

 

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Japanese investors invited to invest in Sialkot EPZ​

SIALKOT (October 10 2008): Economic Adviser to Embassy of Japan in Pakistan Eriko Murata on Thursday visited Sialkot Chamber of Commerce and Industry (SCCI) to discuss various issues pertaining to bilateral trade with the business community of Sialkot. Speaking on the occasion, acting President of SCCI Ziaullah Mirza invited the Japanese investors to invest in Sialkot Export Processing Zone (SEPZ) and avail of the most attractive benefits and incentives.

He said that the SEPZ would open a new era of industrial revolution and foreign investment in this region. "It is encouraging that the two countries have developed institutionalised mechanism for bilateral consultation on various matters, including the security dialogue, counter-terrorism talks and economic policy dialogue that is the manifestation of strength of co-operation and understanding on bilateral and global issues," he said.

Expressing his confidence, he said that Japanese business community would avail full advantage of our liberals' investment regime and strategic location. He said: "We would like to encourage Japanese investors to utilise the investment opportunities in Pakistan, especially information technology (IT), manufacturing and agro-based industries." He also welcomed the progress being made by Pakistan-Japan study group to promote trade and investment and for exploring a free trade agreement (FTA).

Zia further said that an important factor of Japan's success lay in the promotion of small and medium enterprise. As a result of the policy of SMEs promotion, majority of small companies was providing employment to approximately 64.5 million people and 30 percent exports came from the SMEs, he said.

Undoubtedly, the SMEs had been instrumental in bringing out spectacular growth in Hi-tech and value-added industries in the developing countries, he added. The acting President of SCCI further said that in Pakistan, the SMEs were playing a key role, and they were being encouraged through a well-defined programme. Zia Mirza was of the opinion that exchange of trade delegations and one-to-one meeting of businessmen of both the countries was vital to improve bilateral trade.

For this both the countries must ensure simple via policy so that the businessmen could get visas easily. The private sectors of Pakistan and Japan should come forward and interact more frequently to explore and develop co-operation in mutually beneficial fields, he added.

 

[Moin91]

Trade deficit rises to $5.5bn

Saturday, October 11, 2008
By Israr Khan

ISLAMABAD: Trade deficit rose 52.65 per cent to $5.55 billion during the first quarter (July-September) of fiscal year 2008-09, compared to $3.63 billion in the corresponding period of last year, the Federal Bureau of Statistics (FBS) reported on Friday.

According to latest FBS figures, the country recorded imports worth $10.82 billion during the period under review, which were more than double its exports of $5.27 billion. During the same period of last fiscal 2007-08, imports stood at $8.05 billion and exports at $4.42 billion. That depicted 34.29 per cent growth in imports and 19.19 per cent in exports.

It indicates that Pakistan is marching towards another huge trade deficit, which would jack up the current account deficit.

The figures negated predictions that the deficit would fall with the weakening of the rupee. Instead, the trade gap has mounted increased pressure on the rupee.

Despite the rupee’s decline against major currencies, the economy got no significant respite through increase in exports and decrease in imports.

According to the Statistics Division, during September 2008 trade gap widened to $2.03 billion, up by 7.97 per cent from $1.88 billion recorded in August 2008. During the month under review, imports were up by 9.97 per cent to $3.81 billion and exports rose by 12.34 per cent to $1.78 billion over the previous month.

The government in its trade policy for the current fiscal year has set export target at $22.1 billion. Although no import target has been formally announced, the commerce ministry officials estimate it at $37 billion, indicating $15 billion trade deficit by the end of June 2009.

Trade deficit rises to $5.5bn

 

[Moin91]

No banking crisis in sight but rumours hurting industry
Saturday, October 11, 2008
By our correspondent

KARACHI: The past week has been a trying one for bankers and financial managers in Pakistan as rumours circulated of a possible freeze in foreign currency accounts and sealing of safe deposit lockers in banks.

While still unsure about the source of such rumours, what is more worrisome is the effect that they had on the general banking business in the country. Technology has also played its part in creating panic, the overuse of SMS messages only created a hype that things are going out of hand.

For a country that has come out of bigger crisis situations, it is surprising how quickly people start believing the ridiculous. For example, begums and businessmen alike lined up bank at branches for most of the week to take out their valuables on fears that their lockers would be sealed. There is no precedence that such a thing has happened in Pakistan but some are willing to believe anything.

More recently a rumour was started about a leading bank of the country. Bank Alfalah. SMS messages started to circulate over the fact that the bank was about to go bankrupt.

The fact that this bank is a solid investment from the UAE did not deter believers into thinking that such a thing could happen. As a result, the bank suffered in terms of customers getting jittery.

After a clean up operation that was ably handled by then SBP Governor Ishrat Husain some years back, the financial sector in Pakistan is one of the best in the region. The systems in place work and the State Bank has done an admirable role as a regulator. In such a scenario, expecting financial trouble of the kind that is being talked about is misplaced judgement.

People are thinking that the financial problems in the West especially in the US are now having their effect in Pakistan. This is not true, say bankers who argue that most banks in Pakistan are protected in that sense. There are some smaller banks that may be facing liquidity issues but the crisis is not one of them going bankrupt.

In all this, pressure has been put on the rupee dollar exchange rate with the result that this week, the dollar crossed the Rs80 mark. Also, the price of gold has risen owing to panic buying. This is a crisis of our own creation. A crisis caused by vested rumour mongers possibly but believed by an ill-informed public willing to accept anything without asking logical questions.

Part of the fault also lies with the government for not coming out with reassurances. But many say that a strong message by the government may have been taken the other way by a disbelieving public.

In these trying times, one can only hope that the panic buttons are switched off and the people feel more comfortable with what is happening in terms of the financial sector. All is well at this point and we should believe it is so. This is for our own good and for the good of Pakistan, say senior analysts.

No banking crisis in sight but rumours hurting industry

 

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Pakistan looks towards IDB for $500m loan ​

Saturday, October 11, 2008

ISLAMABAD: Pakistan’s economic managers are making desperate endeavours to get dollar inflows from all possible avenues including the Islamic Development Bank (IDB). In this regard, it is striving to achieve a $500 million loan under Trade Finance Facility to purchase oil products.

In another relevant development, the Economic Cooperation Organisation’s ECO Bank has recently approved a $50 million loan facility for Pakistan, which will be used to obtain petroleum products in the coming weeks.

After attending annual meeting of Bretton Woods Institutions (BWI), the International Monetary Fund (IMF) and the World Bank (WB), at Washington from October 10 to 13, Finance Secretary Dr Waqar Masood would go to Turkey to attend a Board of Governors’ meeting of the IDB in order to pursue the bank to extend $500 million loan facility.

“The Board of Governors of the IDB is scheduled to hold a two-day meeting on October 17 and 18 in which the secretary finance would represent Pakistan,” an official source told The News here on Friday.

Pakistani authorities, sources said, are hoping that Saudi Arabia would announce the much-awaited oil facility worth $5 billion on deferred payments during the upcoming Friends of Pakistan (FOP) forum, which will be held by next month in the UAE. Although the US Undersecretary of State, Richard Boucher had made it clear that the Friends of Pakistan was not meant for providing financial assistance and Washington was asking the IMF to support Pakistan.

Pakistan may face problems after the second quarter of the current financial year as it will have to pay $500 million Eurobond installment by January 2009. When a high-level official in the finance ministry was contacted for comments, he said that Pakistan is asking IDB to come forward for rescuing the ailing economy. The IDB has so far approved $100 million Trade Finance Facility during the current fiscal year and Islamabad is asking them to approve the remaining amount of $400 million in the near future, said the official.

“The ongoing second quarter (October-Dec) is quite crucial for Pakistan as it will determine future course of action for tackling complex economic issues,” said the official and added that either Pakistan will go for a bailout package from the IMF, or bilateral friendly countries will come forward to give dollar inflows for rescuing Pakistan’s economy.

According to estimates done by the multilateral creditors including the IMF, WB and ADB, Pakistan requires $7 billion to bridge its financing gap on external front in the wake of yawning current account deficit. Although, the government had taken measures to curtail imports by slapping regulatory duty as well as imposing 100 per cent L/C margins on luxury items, but these measures failed to achieve the desired results.

The creditors are asking the government to take some more stringent measures to curtail its growing trade deficit, which was well above $2 billion in September 2008.

 

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New IPPs, rental plants to improve power supply ​

Saturday, October 11, 2008

LAHORE: Electricity supply to Karachi would vastly improve after the completion of two independent power projects with combined capacity of 775 megawatts and installation of two rental plants with capacity of 436MW.

Secretary Ministry of Water and Power Mohammad Ismail Qureshi stated this during a meeting with the Karachi Electric Supply Company’s management.

He informed the new management that two IPPs were going to install combined-cycle power plants of 305MW and 470MW at Port Bin Qasim in Karachi.

Moreover, two rental plants were planned to be installed, one with a capacity of 205MW at Korangi and the other having 231MW capacity also in Karachi.

After completion of those projects, he added, there would be a significant addition of power to the existing system of KESC.

The meeting also reviewed measures advised in the previous meeting held on September 15 such as enhancement of gas allocation by Sui Southern Gas Co, regular supply of furnace oil by Pakistan State Oil, reducing KESC’s load-shedding duration by purchasing adequate power from IPPs, etc.

It was noted that as a consequence of adopting those measures, the power supply situation in the city had improved compared to the condition prior to September 15.

Progress on technical matters relating to existing power plants and upcoming projects were also reviewed. PEPCO suggested that a few major works/modifications on the Bin Qasim power plant such as installation of ball-cleaning system on unit No 6 and rectification of furnace vibration on gas burning at unit No 3 and 4 should be undertaken during the overhauling schedule.

Recurring faults in unit No 4 of KTPS should also be attended to immediately to enhance its power generation capability.

Progress on 220MW combined-cycle project at KTPS was also reviewed. PEPCO suggested that performance test and commissioning of GT-1 and GT-2 should be carried out expeditiously, as inordinate delays had already occurred in the project. The KESC management assured that those activities would be completed by mid-November, resulting in addition of around 90MW to the existing system.

 

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Bank Alfalah in good health Abu Dhabi Group to invest up to $5 bn in Pakistan ​

Saturday, October 11, 2008

ISLAMABAD: Chief Executive Officer of Abu Dhabi Group Bashir A Tahir said on Friday that Bank Alfalah enjoyed good financial health and the group would increase its investment in Pakistan by $3-5 billion which would go to the construction of a huge complex in Lahore and to the power sector.

After rumours about the financial health of Bank Alfalah, the CEO flew from Abu Dhabi for addressing a press conference here. He said total capital of the bank stood at more than Rs8 billion against the State Bank’s requirement of Rs4 billion.

He said the Abu Dhabi Group invested over $10 billion in Pakistan in telecommunications and other areas and it would bring in more investment in the range of $3-5 billion. He said the decision to freeze foreign currency accounts in 1998 was wrong and no government could do that again. He said the Abu Dhabi government planned to invest $1.5 billion in the power sector.

The Abu Dhabi Group, he said, signed a memorandum of understanding with the Punjab government to construct a huge complex in May 2005 and it took almost three years to get permission from the provincial government which was achieved in March this year. The cost of the complex had increased from $900 million to $1.5 billion and it would be completed very soon, he added. Answering a query, he said he did not know how rumours about the bank spread without any solid ground.

 

[Neo]

IPI gas line: Pakistan may renew offer to China ​

Saturday, October 11, 2008

ISLAMABAD: Pakistan is likely to formally ask China to become part of the multi-billion dollar IPI gas pipeline project, keeping in view the evasive attitude of India to make the project economically viable, a senior government official told The News.

Pakistan is in a dire need of energy and cannot afford further delay in initiating the project. However, India seems not serious in the project. President Asif Zardari is likely to formally invite China to join the project during his visit starting from Oct 14.

The proposal to invite Beijing in the project would be firmed up during the upcoming visit of Iranian Foreign Minister Manouchehr Mottaki, who arrived on Friday. Pakistan wants to take Iran into confidence in this regard prior to floating the proposal to China.

When contacted, Foreign Office spokesman Mohammad Sadiq said the Iranian foreign

minister would have talks on bilateral issues, including the regional situation. He said Pakistan and Iran would also discuss the IPI project on bilateral basis.

When asked if President Zardari would formally invite China during his visit for becoming a part of the project, Sadiq said the offer was already on the table. The official, who has been part of the negotiations with the Iranian authorities on this very vital project, told The News Iran was unable to develop Paras field from where the gas would be exported to Pakistan and India because of liquidity crunch.

The official said India had managed to get some blocks in Iran for developing oil and gas fields. India is investing hugely there and that is why Iran is not in any mood to exclude

New Delhi from the project despite the fact that India is using delaying tactics.

Tehran has come up with new terms and conditions, under which Tehran will not hesitate to block gas flows to Pakistan if India gets no gas, in case of any disruption in Pakistan’s territory. This new condition came from the Iranian authorities that have actually jolted the top Pakistani officials.

Pakistan wants to include China and will try to persuade Beijing to come up with investment in Iran to develop the Paras field so that the project could be implemented.

This will not only provide gas to China if the project is converted into Iran-Pakistan-China (IPC), but would also allay the Iranian concerns about developing the Paras field and making the project economically viable. Iran wants to include India to make the project viable. “In case China becomes a part of the project, Iran will not bother about India.”