COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

Indo-Pak power deal likely to trip

George Iype in New Delhi

While the proposed bus service between India and Pakistan was flagged off for a trial run from Delhi on Friday morning, a power purchase agreement between the two countries is on the verge of cancellation.

The 30-seater air-conditioned bus left the capital for Lahore -- which lies across India's Punjab -- with a high security team and a group of government officials.

During bilateral peace talks last year, India and Pakistan had agreed to launch the bus service between New Delhi and Lahore. The Delhi State Transport Authority officials said that the actual bus service would be kicked off on January 20, if the test runs were found to be trouble-free.

While the bus service between the two countries is all set for a smooth ride, a historic electricity purchase agreement between India and Pakistan will in all likelihood be shelved as the latter has raised serious objections to the proposal.

Indian power ministry officials disclosed that the Pakistan government is now trying to wriggle out of the power deal with India by raising a number of "unreasonable demands and objections".

"Our information is that the agreement to sell electricity to India has invited adverse public criticism against the Nawaz Sharief government. Now Pakistan is trying to put forward new demands in an attempt to either delay or shelve the proposal," a senior ministry official told Rediff On The NeT.

Pakistan Prime Minister Nawaz Sharief had offered to sell nearly 2,000 mega-watts of electricity to the power-starved north Indian states when he met Prime Minister Atal Bihari Vajpayee in September in New York.

Following this, while Pakistan sent a detailed documentation about the deal to the Indian government, Vajpayee sent a high-level team of officials led by Special Secretary Pradip Baijal in the Prime Minister's Office to Pakistan in December to finalise the power purchase deal with the neighbouring country.

According to details of the agreement worked out by the power ministries of India and Pakistan, the first link with Pakistan's power grid would be between the neighbouring cities of Lahore in Pakistan and Amritsar in India, which are barely 40 kilometres apart.

India hoped the power deal would not only add momentum to the diplomatic peace initiatives between the countries, but it would also help India to supply electricity to the country's northern states which have a shortfall of 4,000 mega-watts.

Pakistan's private power policy has been quite successful in the last five years. It agreed to sell electricity to India as Pakistan has now 1,000 megawatts of surplus power-generating capacity, which is expected to increase to between 2,000 MW and 3,000 MW this year.

As per the agreement, to begin with, 500 mw of electricity was to start flowing to the north Indian states of Punjab and Haryana within the next six months.

But Indian officials now say that in an attempt to scuttle the agreement, Pakistan is "re-thinking on the already-agreed deal" by stating that the loss-making state electricity boards of Punjab and Haryana would default on payments to Pakistan.

An official of India's Power Grid Corporation of India, who has been negotiating the deal, cited two reasons for the Pakistan government's attempt to torpedo its electricity selling plan.

"First, there is a strong political opinion against the power deal with India in Pakistan. Second, Pakistan's private power companies are lobbying to stall the agreement as they are insisting that India should produce counter-guarantees to underwrite such deals," he told Rediff On The NeT.

"We have successfully negotiated the electricity agreement. But what we need is a strong political will from both the countries to carry out the accord," the PGCI official added.

India and Pakistan, with three full-scale wars behind them, have so far signed no trade or commerce agreements in the last 50 years, except for a treaty on sharing water from the Indus River.

While the Indian power ministry is soon to write to Pakistan's Water and Power Minister Gohar Ayub Khan to ask him about the status of the proposed power agreement, not many expect that electricity would flow to India so soon as the bus ride to Pakistan.

Business News