Vol. 5 Num 547 Sat. December 10, 2005  
Front Page

Tri-nation Gas Pipeline
Delhi may accept Dhaka's terms

New Delhi may reconsider its objections to Bangladesh proposals on the tri-nation gas pipeline and accept the three conditions put earlier, it has been reliably learnt.

Sources in Dhaka quoting Indian energy ministry officials said that Delhi is likely to address a letter to the energy ministry adviser to this effect. The letter is expected to reach energy ministry later this week, the sources added.

The draft letter says that Indian government has no objection to the Bangladesh proposal and it requests Dhaka to provide the right of way for the tri-nation gas pipeline.

These three Bangladeshi conditions are: provision of transit facility through India to facilitate transmission of hydroelectricity from Nepal and Bhutan to Bangladesh, assured and unhindered utilisation of corridors for trading between Bangladesh, and Nepal or Bhutan through Indian territory and effective measures to reduce trade imbalance between India and Bangladesh.

The fate of the tri-nation gas pipeline has remained uncertain from March when Delhi took a position that it would not sign any bilateral treaty under these three conditions with Dhaka in a tripartite agreement between India, Bangladesh and Myanmar. Earlier in February however, India had agreed on these conditions and signed a draft Memorandum of Understanding (MoU).

Quoting Indian energy ministry officials, sources also said that India changed its mind because the option of bypassing Bangladesh and importing gas directly from Myanmar turned out to be difficult. In such a case, India would have to install an additional 1000 km of pipeline through an insurgency infested and geographically tough region. Such options are very risky and also very costly.

The sources said if India imports Myanmar gas bypassing Bangladesh, the price of gas at Kolkata point can go as high as 6 dollars to 6.5 dollars per million British thermal unit (MBTU). This price would be 2 to 3 dollars lower if imported through Bangladesh where the pipeline length would be only 290 km. Therefore, this option has been finally discarded.

India is the region's biggest energy consumer that is perennially facing energy shortage. To stay even with its power demand growth, India must add 100,000 megawatt new power generation by 2020. This is why India is tapping all kinds of resources.

India is also hosting later this month a meeting of senior officials and experts to discuss the technical matters to explore the possibility of a trans-BIMSTEC power transmission grid. This will involve India, Bangladesh, Bhutan, Nepal, Sri Lanka, Myanmar and Thailand, says our Delhi correspondent Pallab Bhattacharya.

A Delhi energy ministry official said, "things are definitely moving in positive direction. Even if this is not resolved bilaterally, it will be resolved multilaterally."

At the first minister level meeting between Bangladesh, India and Myanmar on January 13, former state minister for energy AKM Mosharraf Hossain spelled out three conditions which the Indian minister assured of positive considerations.

Upon his return from Myanmar, former state minister for energy Mosharraf said that Bangladesh will not sign the tri-national gas pipeline agreement unless India signs the bilateral treaty with Bangladesh.

In the follow up first meeting of the techno-commercial working committee in Yangon on 24-25 February, the two-member Bangladeshi team comprising the then Petrobangla Chairman SR Osmani and Director of Gas Transmission Company Ltd (GTCL) Abu Salek Sufi were given India's initial response.

India's initial response to these conditions was: Nepal itself is facing power crisis and Bhutanese electricity is generated in Indian funded projects. Secondly, there is a limited transit facility for trade between Bangladesh and Nepal/Bhutan which itself remains under-utilised. Thirdly, to reduce trade imbalance, Bangladesh should increase its export basket by including items like pipeline project, road and rail transit to India's northeast-- instead of seeking a balance in commodity trade.

But India eventually agreed to the three conditions of Bangladesh and included them in the draft MoU signed between the three countries.

One month later some news reports dismissed the prospect of signing a bilateral treaty as part of the tri-national agreement and stated that if Dhaka does not move from its position, India would import Myanmar gas bypassing Bangladesh.

Officially India denied holding such a position but at the same time, it did not invite Bangladesh to hold the next round of meeting in March or April, as it was planned earlier. Instead, Delhi invited Dhaka in June to the follow up meeting--only a day prior to the event. Dhaka could not attend the meeting.

In August the then Indian foreign minister Natwar Singh visited Dhaka and held meetings with Finance Minister M Saifur Rahman and Energy Adviser Mahmudur Rahman that gave out positive signals. However there was no practical progress after that.

The trans-national pipeline project was conceived nine years ago. But following a political nod late last year, Dhaka moved ahead with it through a ministerial-level meeting in January.

As per the proposal, the pipeline will begin from Myanmar to transmit gas to India's Tripura and enter Bangladesh in the east to pass on to West Bengal.

Under this plan, Tripura will pump gas in the pipeline for transmission to West Bengal through Bangladesh. And Bangladesh can also add its own gas in the pipeline to transmit it from one point to another. Besides improvement of diplomatic relations, Bangladesh will earn a lot of foreign exchange through wheeling charge when the project is implemented, sources mentioned.