Source: Islamic Republic News Agency
Pakistan has awarded the contract of building its portion of the multibillion-dollar Iran-Pakistan gas pipeline to an Iranian firm, a media report said on Thursday.
'Express Tribune' quoting sources reported that Iranian firm Tadbir Energy has been awarded the contract to construct Pakistan's portion of the gas pipeline.
It said the initialisation of the contract took place during a recent visit of a Pakistani delegation to Tehran. The pipeline construction will be formally launched on March 4 on the Pak-Iran border.
Pakistani President Asif Ali Zardari during a meeting with Iranian Oil Minister Rostam Qasemi in Tehran on Wednesday February 27, 2013
The Pakistan cabinet has already approved a waiver of the Public Procurement Regulatory Authority rules in order to award the contract directly to Tadbir Energy.
Sources added Pakistani public sector firm Interstate Gas Systems (ISGS) and Tadbir Energy have initially signed the contract in Tehran, and now the ISGS board will endorse it. Iran designated Tadbir Energy to work on the project for which Tehran is also extending a $500 million loan.
The firm is controlled by the Imam Khomeini Relief Foundation, one of Iran's largest charitable groups.
Sources added that Tadbir Energy would undertake all engineering, procurement and construction for the first installment starting from the border at a cost of around $250 million.
Tadbir Energy will also undertake the second phase of the project, and will increase the financing by allocating a further $250 million to the pipeline project, subject to discussions regarding its involvement in the distribution of gas in Pakistan later on.
It has also agreed to provide and assist in arranging $250 million as supplier credit and any additional financing for the second phase. The firm will act as the lead contractor along with the nominated local subcontractor.
The total cost of the project is expected to be around $1.5 billion.
Pakistani President Asif Ali Zardari (L) with his counterpart Mahmoud Ahmadinejad in Tehran
The project envisages gas inflows of 750 million cubic feet per day by the end of December 2014, which will be consumed by power plants to generate around 4,000 megawatts of electricity.
The project's engineering and management consultant, who was appointed in April 2011, has completed work on a bankable feasibility study, an interim front-end engineering.
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