Pakistan and Russia inch closer further on the economic front
ISLAMABAD – Pakistan and Russian have signed a revised deal for a major bilateral gas pipeline project with Islamabad getting more shareholding in it.
Under the revised deal, the project’s name has been changed to Pakistan Stream Gas Pipeline from formerly known as the North South Gas Pipeline.
Both sides also agreed to run the project through a special purpose company, which would be incorporated in Pakistan.
Pakistan will not have 74 percent shareholding while Russia’s participation has been reduced to 26% from previous 85 %.
Earlier, Russia had to construct the gas pipeline on the build, own, operate and transfer (BOOT) model under which the ownership of the project was to transfer to Pakistan after 25 years.
After the revised deal, Pakistan would contribute 74% of the total capital by utilising gas infrastructure development cess (GIDC) and Russian will spent 26%.
Though Russia has minority shareholding, Pakistan will ensure utilisation of Russian material, equipment and resources.
The move aims at boosting technical and operational capacity of Pakistani companies and human resources through mutual working and training.
A Russian technical delegation arrived in Pakistan on Monday (Nov 16) on three-day visit to discuss the formerly known as NSGPP.
The team held its first meeting from November 16-18, 2020 in Islamabad on mutual cooperation for the development of gas pipeline project, which is being launched to mitigate current gas shortage in the country.
The revised deal happens after a Supreme Court of Pakistan’s ruling in the matter of GIDC and availability of GIDC funds for project development.