Pakistan's $18 billion in DANGER: Amid bankruptcy, gas pipeline project with Iran haunts Sharif govt

Islamabad: As Pakistan continues to reel under severe economic crisis, the Shehbaz Sharif government is making all efforts to reach an agreement with the International Monetary Fund soon, helping the cash-starved country avert default. However, Islamabad may have to lose a whopping $18 billion in coming time as yet another key project has come to haunt the debt ridden country. The Shehbaz Sharif-led coalition government has been asked by the members of the National Assembly Standing Committee on Foreign Affairs to eliminate obstacles in order to complete the Pakistan-Iran Gas Pipeline Project to avoid the possible fine of $18 billion in case of failure to complete the construction on its side by next year, Dawn report. [caption id=“attachment_12237782” align=“alignnone” width=“640”] Pakistani Prime Minister Shehbaz Sharif. AFP[/caption] Despite sanctions on Iran, few regional countries have been granted waivers in doing oil trade with Tehran, however, Islamabad was unable secure such waivers to engage in the beneficial oil trade relations with Iran, said the committee’s chairman Mohsin Dawar, according to an official handout issued by Pakistan’s National Assembly Secretariat. ‘Learn from India and China’ Mohsin Dawar has urged the need for a robust diplomacy and asked officials of the ministries of commerce and foreign affairs to aggressively pursue options to secure waivers on oil trade with Iran, like what India and China had done, Dawn reported. Raising concerns over the inordinate delay in completion of gas pipeline project with Iran, the committee members asked why an agreement was concluded when it was not complied with. They further asked about repercussions of Pakistan’s ‘failure’ to complete the construction work on the Pakistani side. What’s the deadline? As per the agreement between the two nations, the project was to be completed by 2024, the committee was informed. If Pakistan fails to meet the deadline, it will have to face arbitration in a French court and might face a massive $18 billion fine if it terminates the Iran-Pakistan gas pipeline agreement. In this regard, the committee chairman has urged Pakistan’s Ministry of Commerce to furnish the comprehensive report regarding Pakistan-Iran trade potential. The committee further recommended that the Shehbaz Sharif government should make all-out efforts to secure waivers from sanctions on oil trade with Iran. Despite sanctions, Iran’s exports stood around $80 billion, including $40 billion from non-oil based products, the committee was informed. IMF bailout The Pakistani government has reportedly completed all prior actions needed for the staff-level agreement with the International Monetary Fund (IMF). If successfully completed, Pakistan would be entitled to 894 special drawing rights (SDRs) of the IMF with a calculated value of $1.2 billion, Dawn reported. The deal has been delayed since October last year because of the Pakistani government’s reluctance to allow free movement of the exchange rate, increasing the interest rate and full-cost recovery of power supply through additional surcharges and other adjustments to generate more than PKR 600 billion in less than two years, the report said. (With inputs from agencies) Read all the Latest News , Trending News ,  Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.