| ISLAMABAD, March 14
ISLAMABAD, March 14 A top Pakistani
government body said that China's largest bank is backing away
from a long-running plan to build a gas pipeline from Iran to
Pakistan, a project that the United States has strongly opposed.
The Industrial and Commercial Bank of China (ICBC)
, the world's most valuable lender, had previously
submitted a bid to act as financial adviser for the estimated
$1.25 billion project, according to a Pakistani finance ministry
But the bank is "showing less interest," the
Economic Coordination Committee of the Cabinet said in a
statement issued late on Tuesday.
A Pakistani finance ministry official said the fear of U.S.
sanctions on companies dealing with Iran appeared to be weighing
on the Chinese bank.
"I don't think they are in the mood to brave American
pressure and the threat of sanctions from any dealings with
Iran," the official told Reuters, requesting anonymity because
he is not authorised to speak to the media.
The United States has said Pakistan should be wary of
committing to the proposed gas pipeline because sanctions could
hit Pakistani companies.
Western powers believe Iran is using its nuclear program as a
means to build weapons. Tehran says it needs nuclear-generated
Pakistan is plagued by chronic electricity shortages that
have sparked demonstrations and battered the weak civilian
If the ICBC formally pulled out of the project, the ECC said
there were four options: funding through a new tax, finding more
financing banks, government-to-government agreements with Russia
or China to fund the entire project or a
government-to-government agreement with Iran.
A spokesman for the Pakistani Ministry of
Petroleum, however, said ICBC was not walking away from the
"ICBC is still engaged in IP (Iran-Pakistan) project and the
negotiations are still going on," Irfan Ashraf Qazid said.
"There were several options presented by the ministry
regarding funding of this IP project but somehow the press took
it as if these options were being presented because ICBC was
trying to back out, which was not the case."
There was no immediate comment from the ICBC in Beijing.
Pakistan's Foreign Minister Hina Rabbani Khar told reporters
ICBC's reluctance would not impact the project.
"There can be, always are multiplicities of funding sources
which are available for any project," she said.
"This is a fairly viable project and we hope and we do not
see any problem in trying to find ways and means of ensuring its
Islamabad and Tehran agreed on a gas pricing mechanism for
the 800-km long project in January, soon after U.S. sanctions
were imposed, but the terms were never made public.
Like the pricing mechanism, much of the pipeline's details
(Additional reporting by Chris Allbritton and Mahawish Rezvi in
ISLAMABAD, and Teril Jones in BEIJING; Editing by Sanjeev