Broad terms on TAPI deal finalised; decision on gas price by July

As per the plan, 38 million metric standard cubic metres per day (mmscmd) of gas would be supplied to both India and Pakistan for 30 years while 14 mmscmd would be bought by Afghanistan

New Delhi: Side-stepping security concerns, India on Thursday finalised most of the terms on which it plans to buy natural gas from Turkmenistan through a pipeline passing through Afghanistan and Pakistan, reports PTI.

Terms of the Gas Sale and Purchase Agreement (GSPA) were finalised at a meeting of the oil ministers of the four to Turkmenistan-Afghanistan-Pakistan-India gas pipeline here yesterday but crucial aspects of price of gas and transit fee were left to be decided by July.

“All four countries are equally interested in the TAPI pipeline,” oil minister S Jaipal Reddy told reporters after the ministerial meeting that was held after three days of technical-level talks.

The transit fee that India has to pay to Pakistan and Afghanistan for allowing passage of the gas will be decided at an official level meeting in Kabul on 13th and 14th May.

After ascertaining the transit fee and transportation or charge for wheeling the gas through the pipeline, the four countries will meet in Turkmenistan to discuss gas price.

The gas purchase framework agreement, which was agreed in December last year, has been amended by the ministers to extend the deadline for signing of the GSPA to 31st July from April-end that was decided earlier.

A consortium that will build and operate the pipeline will be put in place by 2013 and the pipeline will be completed by 2016, Mr Reddy said.

Mr Reddy, however, side-stepped questions about security of the pipeline that is to transport gas from southern Turkmenistan to India through Afghanistan’s Helmand and Kandahar provinces that are under control of Taliban.

A Hussain, energy advisor to the prime minister of Pakistan, said: “We are looking at the security concerns... we will make arrangements for the security.”

Asked if Mr Hussain’s statement was enough for India to be assured of safety of the pipeline, oil secretary S Sundareshan said the Pakistani official “has already stated that.”

“Transit countries will take responsibility of safety and supply,” Mr Reddy said.

The pipeline will traverse 1,650 km of Afghan and Pakistani territories before entering India at Fazilka, in the state of Punjab.

As per the plan, 38 million metric standard cubic metres per day (mmscmd) of gas would be supplied to both India and Pakistan for 30 years while 14 mmscmd would be bought by Afghanistan.

Construction of the pipeline is due to start in 2013 and be completed and operational by the end of 2016.

Turkmenistan is talking of three different prices for Afghanistan, Pakistan and India that are likely to be not less than $7-$7.5 per million metric British thermal unit (mmBtu), the rate at which it sells gas to China.

At the ministerial meeting, New Delhi raised the issue of safe delivery of fuel through the line.

“There are issues that need to be addressed. We have to come to a decision regarding the price of gas, security of the pipeline, certainly of gas supply, transit fee and setting up of the consortium,” Mr Reddy said at the meeting.

As a buyer, and being at the tail-end of the project, India has concerns relating to safety of the pipeline and safe transit of gas through Afghanistan and Pakistan.

“Quite obviously, our goal is not merely the construction of the pipeline, but also continuous and uninterrupted flow of Turkmen natural gas over several decades,” Mr Reddy said.

“This project would be an enduring example of regional cooperation, bringing together Central Asia and South Asia in a long partnership for mutual benefit and advancement. The TAPI project is going to be the Silk Route of the 21st Century,” Mr Reddy said.

TAPI is being pushed by the US as an alternative to Iran-Pakistan-India (IPI) pipeline.

The Asian Development Bank (ADB) is the Lead Development Partner of the project, which envisages supply of gas from Turkmenistan’s South Yoloten-Osman field to Afghanistan, Pakistan and India.

Turkmenistan will deliver the gas at the Afghanistan border and thereafter, a consortium of companies constituted by the project participants would take responsibility for establishing, operating and maintaining the transnational pipeline for transportation of the gas.

This is a major departure from the terms that are being discussed for the IPI pipeline. New Delhi will take custody and pay for the gas through the IPI only at its border with Pakistan, making Iran and Pakistan responsible for safe delivery of gas.

But in case of TAPI, Turkmenistan will not be responsible for any shortfall in supplies caused due to disruptions.


EPFO to pay 9.5% interest on claims till new rate is decided for FY12

The 9.5% rate was announced in September effective for 2010-11. But subscribers settling their claims this year will retain the gains if the new rate is lower and claim the difference if the new rate is higher

New Delhi: Subscribers of Employees’ Provident Fund Organisation (EPFO), which manages retirement funds, will get 9.5% interest on their deposits, till a new rate is decided for the current financial year.
“Since the rate of interest (on deposits) for 2010-11 was declared as 9.5% per annum, the settlement of claims of EPF subscribers in 2011-12 shall be made at 9.5% per annum till the rate of interest is declared for 2011-12,” EPFO said in a statement on Thursday.

The decision will benefit those subscribers who are either retiring or applying for a full and final settlement of their account, before the new rate is announced, PTI reports.

In September, the EPFO announced a rate of 9.5% for 2010-11, which was ratified by the finance ministry. There are about 4.71 crore EPF subscribers.

The order was contrary to the view of the chairman of the EPFO’s apex decision-making body, the Central Board of Trustees (CBT), who were pushing for 8.5% for 2011-12 to all subscribers settling claims this fiscal.

The EPFO was giving 8.5% return to subscribers in the five years since 2005-06. This was raised to 9.5% for 2010-11 when the EPFO discovered a surplus of over Rs1,700 crore.

According to the Employees’ Provident Fund Scheme, the EPFO is required to settle claims at the rate provided in the previous fiscal, in case the rate for the subsequent financial year has not been declared.

Subscribers will retain the gains even if the EPFO announces a lower interest rate for the new year, and they will be able to claim more if the rate happens to be higher.


Air India to operate only 50 flights today as executive pilots join protest strike

Nearly all executive pilots have reported sick since yesterday, seriously curtailing the airlines ability to operate the regular schedule of 320 flights

New Delhi: Air India has said it will operate about 50 flights across its network, against the daily schedule of 320 flights, as all executive pilots also joined the protest strike by pilots that entered its third day today.

“Under the contingency plan, we are operating 50 flights across the network today,” an Air India official said.

From Delhi, the national carrier will operate just 10 flights, and an equal number from Mumbai to the metro cities, PTI reports.

The airline has decided to use three wide-body Boeing 777 aircraft on the Bombay-Delhi-Ahmedabad- Bombay and Bombay-Ahmedabad-Bombay sector, so as to accommodate more passengers, the official said.

It will operate four special services using Air India Express from Mumbai, flying Boeing 737 on the Bombay-Abu Dhabi-Bombay, Chennai-Singapore-Chennai, Cochin-Calicut-Cochin and Calicut-Dubai-Calicut routes. Additionally, a jumbo service will operate on Bombay-Dubai-Delhi-Bombay.

With both the pilots association and the management hardening their positions, passengers continued to bear the brunt of the flights disruption. Most flyers have cancelled their tickets on Air India, but some are being accommodated on flights of other airlines.

According to the official, the cash-strapped national carrier is losing Rs4 crore daily on account of the flights disruption. Sources estimate that the figure may be more, as the airline has liabilities towards payment of instalments of new and leased aircraft and the salaries of its employees.

Yesterday, executive pilots started reporting sick, to join the agitation. The management has terminated the services of seven pilots and suspended six others.

“We are extending our 100% support to our agitating younger brothers in the Indian Commercial Pilots Association (ICPA). Over 300 executive pilots have reported sick, now it is up to the management to take action against all 800 pilots,” a senior pilot said. Out of 69 executive pilots, 68 had yesterday reported sick in Delhi and at other bases.

On Thursday, the Air India management initiated contempt of court proceedings against the pilots before the Delhi High Court, but the pilots have remained unfazed. Also, the conciliation talks called by the chief labour commissioner, between the management and the agitating pilots, have not made any headway as both sides stuck to their positions.

About 800 pilots, most of them from the former Indian Airlines that has been merged with Air India, have been on strike since Tuesday night, demanding a probe by the Central Bureau of Investigation (CBI) into the mismanagement of the airline and the removal of the chairman and managing director. They have also been arguing for a fixed salary.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)