TAPI has Potential but Challenges Remain
Photo Credit: AFP
By Aditi Bhaduri

TAPI has Potential but Challenges Remain

Apr. 05, 2018  |     |  0 comments


On February 23, 2018, the representatives of Turkmenistan, Afghanistan, Pakistan, and India attended the ground-breaking ceremony for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline in the Western Afghan city of Herat. Gen. John Nicholson, the commander of the US Forces in Afghanistan also joined them. The TAPI pipeline, which measures 1,814 km, is an ambitious project that is intended to transfer 33 billion cubic feet of natural gas from Turkmenistan to Afghanistan, Pakistan, and India.

 

The landlocked Central Asian country of Turkmenistan possesses the world’s fourth largest natural gas reserves, which is almost its only export and the major source of its revenue. The other three countries on the other hand are heavily dependent on energy imports. Given the enormous benefits that the pipeline promised both the energy rich Central Asian region and energy-starved South Asia, the pipeline, which was first mooted almost three decades ago in 1989, is therefore is a much-cherished endeavor. At one time in the 1990s, even the Taliban were in talks with UNOCAL for the construction of such a pipeline, given the enormous profits Afghanistan would take in through transit revenue.

 

33 billion metric tons of gas are expected to flow in from Turkmenistan to South Asia, from which Afghanistan would get 16 percent and Pakistan and India 42 percent respectively. In addition to the above, Afghanistan and Pakistan would also receive transit fees. According to the Afghan TOLONEWS agency, the country would earn USD 500 million as transit fees from the pipeline. Pakistan is likewise slated to receive around USD 217 million from India in transit fees.

 

The pipeline would originate from Dawlatabad in Turkmenistan and extend to another 735 km in Afghanistan from Herat, Helmand, Kandahar provinces to Quetta, Pakistan and the pipeline will then enter the Indian territory via Punjab, Pakistan. Two major challenges for the pipeline are that it has to traverse through the badlands of the AfPak region and also navigate through India-Pakistan rivalry. It has also been reported that the Afghan government has committed to provide 7,000 security personnel for the protection of the vital pipeline in Afghanistan.

 

Given the lawless situation in Afghanistan following the 9/11 events, the project long remained a pipe-dream, though members have periodically reiterated their commitment to it. More recently, the US has also been backing the pipeline as a major confidence building measure, believed to be part of its New Silk Road strategy. The Asian Development Bank had also evinced major interest and currently remains the USD 10 billion pipeline’s main backer.

 

War-ravaged Afghanistan remains central to the enterprise, being the only link between Central and South Asia. TAPI’s transit through Afghanistan and Pakistan is expected to bring better regional cooperation and guarantee security, both between Afghanistan and Pakistan and also between Pakistan and India. Furthermore, given the transit fees that Afghanistan (and Pakistan) would earn, as well as the energy security, TAPI is also expected to generate jobs and help the Afghan economy, thus stabilizing the war-torn country, and integrating Afghanistan into the regional economy while strengthening regional cooperation. Improving the economy is considered vital for reaching national reconciliation.

 

TAPI is also seen as a rival pipeline to the other long-proposed one from Iran to Pakistan and India. However, given the fresh sanctions imposed on Iran by the US, the TAPI pipeline seems more promising. On its part, insulated and cash-strapped Turkmenistan was eager to get the project off to a start. To that end, in 2012, Turkmengaz, Inter State Gas Systems of Pakistan, and the Gas Authority of India signed an agreement for sale and purchase of gas. In November 2014, the TAPI Pipeline Company Ltd. consortium was incorporated with all four member-states as equal shareholders.



Security remains the major challenge. The pipeline has to traverse some 740 sq. km of Afghan territory through some of its most volatile regions.



In December 2015, the representatives of the four countries attended the very first ground-breaking ceremony of the first leg of the pipeline in Merv in Turkmenistan. At the ceremony in Merv, Turkmen President Gurbanguly Berdymukhamedov called the occasion “historical” while Pakistan’s then-Prime Minister Nawaz Sharif who had also attended the ceremony said that the pipeline would “help promote peace and trade amongst the regional countries.” India’s then-Vice President Hamid Ansari noted that TAPI was more than just a gas pipeline project — it was the first step towards an “economically integrated region stretching from the Bay of Bengal to the Caspian Sea.”

 

For Afghanistan the project will be lucrative, not least by holding out the promise of affordable electricity, so much so that, in a rare move, the Taliban have also pledged to secure the pipeline. Voice of America reported that the purported Taliban spokesperson Qari Mohammad Yusuf Ahmadi stated in an email that: “The Islamic Emirate views project as an important element of the country’s economic infrastructure and believes its proper implementation will benefit the Afghan people. We announce our cooperation in providing security for the project in areas under our control.” At the ground-breaking ceremony in Herat, where the Turkmen President was also present, Afghan President Ashraf Ghani tweeted: “A new chapter of economic growth and regional connectivity starts.”

 

For Turkmenistan, the project is just as important and lucrative. At a time of falling gas prices, and with Russia, the country’s major gas export market, refusing to source any more Turkmen gas, the pipeline allows the diversification of Turkmenistan’s export base. Turkmenistan’s Deputy Minister of Finance and Economy Merdan Bayramdurdyyev said that the gas pipeline would promote the rise of national economies of the participating countries of the project and the consolidation of political stability throughout the region.

 

Certainly, TAPI has vast possibilities and immense potential. To the extent that other countries and corporations have evinced major interest in it, including Saudi Arabia, China, and Bangladesh. Some analysts caution against the project becoming overly ambitious and too wide in scope. But the participation of Saudi Arabia is encouraging, both in terms of financing and also in terms of security, given the enormous influence that the kingdom has in Pakistan and Afghanistan.

 

The current geo-political dynamics in the region also make it a valuable initiative. After unveiling its new South Asia policy, the US has taken a more hard-line approach regarding its military presence in Afghanistan as well as towards Pakistan, slashing military and non-military aid. Yet, the US understands that there are limits to the penalizing measures it can take against Pakistan as long as it remains engaged in Afghanistan. The “peace pipeline” — as TAPI is also known — can significantly incentivize Afghan-Pakistani rapprochement.

 

Nevertheless, challenges remain. For one, TAPI’s scale is enormous and some analysts have voiced concern regarding the capability of Turkmengaz, the Turkmen organization that is overseeing the project, to see the project through. The timeline, with expected completion in 2019, is also ambitious. Project costs have also increased and now stand at USD 10 billion. Pakistan and India have committed to only five percent of the cost — USD 500 million each.

 

Finally, security remains the major challenge. The pipeline has to traverse some 740 sq. km of Afghan territory through some of its most volatile regions. Though the Taliban have pledged to safeguard the portion of the pipeline that runs through territory under its control, the group still refuses to talk to the Afghan government. At the same time there are other non-state actors at play in the country. For instance, on the day of the ground-breaking ceremony in Herat, local media reported that a major attack planned to target the ceremony had been averted. There is also the rise of the Islamic State terror group in the region, which is opposed to both the Afghan government and the Taliban. The same concerns impinge on the pipeline route in Pakistan which runs for 826 km through insurgency-wracked Balochistan province. In addition, groups hostile to improved India-Pakistan bilateral ties are known to have sabotaged initiatives intended to build confidence between the two countries.

 

Nevertheless, it is important to keep in mind the words of Charles Hendry, chairman of London-based Eurasia Partners consultancy and Britain’s former energy and climate change minister: “[TAPI] is precisely this kind of big multi-state project that can bind countries together geopolitically.” With its potential, TAPI is an idea whose time has arrived.

 

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