Formation of SPV (TAPI Limited) for the TAPI Pipeline Project and to permit GAIL India Ltd. to join the SPV
The Union Cabinet today gave its approval for formation of the Special Purpose Vehicle (SPV) for the Turkmenistan-Afghanistan-Pakistan-India(TAPI) Pipeline Project and to permit GAIL India Ltd. to join the SPV.
The four countries involved in the TAPI Gas pipeline project, signed an Inter-Governmental Agreement along with a Gas Pipeline Framework Agreement(GPFA). To accelerate the project, parties have formed the Minister Level Steering Committee and Technical Working Group (TWO). Suitable provisions for security & safety of the pipeline have been made in the Inter-Governmental Agreement (IGA) and Gas Pipeline Framework Agreement (GPFA).
In the meeting of the 16th Steering Committee held on 23rd September, 2012, all parties reaffirmed their commitment and intention to fast track this important regional co-operation project. As a way forward, Turkmenistan suggested the formation of a SPV by the TAPl members. The SPV would take up the Feasibility Study and Design work of the TAPlpipeline to meet the agreed timelines for the project, as well as search for a consortium lead.
Turkmenistan and Pakistan agreed to the formation of TAPl Ltd. considering it to be in consonance with the GPFA. Afghanistan also agreed to the formation of TAPl Ltd. so long as there was consensus amongst the Parties.
TAPl Ltd. is required to have an initial contribution of USD 20 million that is USD 5 million from an identified entity from each of the four participating countries. GAIL, being a Navratna Company, is empowered to make an investment of this level for India.
GAIL has agreed to make an investment upto USD 5 million in the proposed SPV that is TAPI Ltd. An active interest in the project by all the partner countries at this stage would sustain the credibility of the project, and generate interest in the international market and could eventually pave the way for selection of an appropriate consortium leader in the future.
Based on an `in-principle` approval of the Cabinet on 18th May, 2006, India joined the Turkmenistan-Afghanistan-Pakistan (TAP) Project in April, 2008 and thereafter, the name of the project stood amended to Turkmenistan-Afghanistan-Pakistan-India (TAPl) Gas Pipeline Project.