Pipeline Politics Continues....

Daily Times, January 31, 2006
Aiyar’s departure blow to IPI pipeline project
By Iftikhar Gilani

NEW DELHI: The Iran-Pakistan-India gas pipeline has become suspect with the change of guard in the Indian Petroleum Ministry.

While the previous minister Mani Shankar Aiyar was said to have an anti-west tilt and was considered a strong advocate of this pipeline, his successor Murli Deora is known to be pro-US and often throws parties for visiting US legislators.

Aiyar’s removal from the oil ministry is widely seen as a result of intense pressure from domestic private lobbies and the Americans, who were not happy with his left-oriented view of the global economy.

Deora may not be able to pursue the high-pressure oil diplomacy that Aiyar carried out in the past 20 months which lined up over a dozen countries for partnership with India in the energy field. The journalists who routinely cover the Petroleum Ministry also point out how Aiyar worked to promote public sector oil companies and would not allow oil giants like Reliance Industry of the Ambanis to succeed in their designs of privatising oil companies using their political clout.

Everyone expected Aiyar to be relieved of the Panchayati Raj portfolio in order to continue on the energy front, using his past experience as an Indian Foreign Service (IFS) cadre officer. He has been given the Sports and Youth Affairs Ministry.

His close terms with the Gandhi family since Rajiv Gandhi’s days couldn’t help him retain the petroleum portfolio, leading observers to conclude that there might have been some kind of pressure on the prime minister.

If performance were the criterion, Aiyar would not have been touched. It was Aiyar who made headlines in the financial dailies around the world by laying the foundation for a partnership with China on the oil front and proposing an Asia-wide hydrocarbon grid that generated interest in countries like Turkey, Kazakistan, Iran, China and Korea. Prime Minister Manmohan Singh has so far echoed Aiyar’s theory that India’s oil and gas deals with Iran are separate from the civilian nuclear deal with the US.

The responsibility now falls on Deora to prove that he would not allow the Americans to dictate to India on the Iran pipeline issue or yield to the written US demand to India earlier this month warning against investment in Syrian oilfields.

Known for his liaison capabilities, Deora is expected to improve communication between the government and business leaders but analysts say the real test will be how he deals with the Americans.