ISLAMABAD - Petroleum Secretary Abid Saeed on Thursday said that Islamabad has requested Tehran to amend the much-criticised Iran-Pakistan Gas Pipeline Project to stay away from penalty to be imposed on delay in implementing the project.

“Iran-Pakistan Gas Pipeline Project is facing delay due to the international sanctions imposed on Tehran. However, Pakistan has requested Iran to amend the project to avoid penalty for delaying the project,” Abid Saeed said in the meeting of Senate Standing Committee on Finance Revenue and Economic Affairs.

The Senate Standing Committee on Finance Revenue and Economic Affairs, which met with Senator Nasreen Jalil in the chair, finalised the budgetary proposals of the senators on the fourth day. The committee would present its recommendations in the upper house of the parliament which would move them to the lower house.

The committee discussed the Iran-Pakistan Gas Pipeline Project. The petroleum secretary informed the committee that the project was scheduled to be completed by end of December 2014, but it could not be completed due to international sanctions on Iran. “We have asked the Iranian government that the project is being delayed due the international sanctions on Tehran,” he remarked.

A technical delegation of Iran visited Pakistan last week to discuss the important issues related to the project and both the countries discussed the Gas Sales Purchase Agreement (GSPA) with focus on extending the dateline of the project, he added.

The petroleum secretary disclosed that Pakistan was also working on an alternate strategy to remove bottlenecks in implementation of the Iran-Pakistan Gas Pipeline Project.

The senators raised questions on the fate of the gas pipeline project. Senator Osman Saifullah Khan of Pakistan People’s Party (PPP), in his remarks, said the US was improving relations with Iran, but penalties were being imposed only on Iran-Pakistan Gas Pipeline Project.

Senator Sardar Fateh Muhammad Husni said no budgetary provision has been made for the Pak-Iran Gas Pipeline Project. Finance Secretary Dr Waqar Masood Khan said the government wanted to resolve the issue amicably to avoid any penalty.

Earlier, the senators staged a walkout from the committee meeting on the alleged incorrect information given by Federal Minister for Planning Development and Reforms Ahsan Iqbal on changing routes of Pak-China Economic Corridor. Senators Ilyas Bilour, Talha Mahmood, Sughra Imam, Kalsum Parveen, Saleem Mandviwala and Sardar Fateh Muhammad Husni staged a walkout from the meeting. Later, they came back to the committee on the request of Senator Rafique Rajwana of PML-N.

Dr Waqar Masood made it clear that the government would not recover circular debt by raising tariffs. He said the relevant ministries were going to start a drive to recover outstanding amounts equivalent to the circular debt.

Federal Board of Revenue (FBR) Chairman Tariq Bajwa said the withdrawal of 10 percent federal excise duty (FED) on motor vehicles exceeding 1,800cc would increase sales tax collection on expected increase in local sales by car manufacturers in 2014-15.

Joint opposition in the Senate said the proposal of 10 percent FED withdrawal on vehicles above 1800cc may be withdrawn. After hearing justification from the FBR Chairman, the committee dropped the proposal.

Senator Ilyas Ahmed Bilour informed the committee that the Gas Infrastructure Development cess was an act of Parliament and should not be a part of Finance Bill. Bilour said the matter needs to be taken to the Council of Common Interests (CCI) for raising the GIDC. Without the approval of the CCI, the government cannot raise the GIDC, he held.