Thursday, July 14 2005 14:04 Hrs (IST) - World Time -

New Delhi: The ambitious Iran-Pakistan-India gas pipeline is likely to cost upwards of $7 billion, 75 per cent more than previous estimate of $4.16-billion, mainly due to rise in steel price.

According to the latest estimate presented to the Indo-Pak Joint Working Group, which met here on July 12-13, the cost of laying 2100-km of pipeline from Assaluyah port in Iran (on Persian Gulf) to Indian border (Barmer district in Rajasthan) may be $7.42 billion to be spent over the construction period of five years.

The cost has also gone up on account of higher cost of acquisition of land for laying the pipeline in Iran and Pakistan with New Delhi suggesting that the pipeline pass through thickly populated areas to avoid sabotage, an official said.

A further increase in cost by 10 per cent would see the pipeline ending with an expenditure of $8.16 billion while a 10 per cent reduction in raw material cost would bring capital expenditure down to 6.67 billion dollars.

"The previous estimate of $4.16-billion was made some years ago by BHP Bhiliton of Australia, which was engaged by Iran to do a pre-feasibility study of the pipeline. Steel prices have since nearly doubled," the official said.

New Delhi at the meeting suggested the Iranian state-run firm National Iranian Oil Co or National Iranian Gas Export Co own the gas till the delivery point at Pakistan and India border and the pipeline be either owned and operated by the same company or by a consortium of Iranian, Pakistani, Indian and international firms.