The briefing conducted by DPM Meredov on 16 January 2021 at the auditorium of the institute of foreign relations was quite elaborate. He took six questions from the audience – four from the local and foreign media, and two from the academic community – and in doing so he covered the key aspects of the role of Turkmenistan in helping Afghanistan gear up for economic remake.
Because of the requirements of social distancing, the number of people in the hall was only a fraction of its full capacity.
Before summarizing the contents of the answers given by Meredov, it is relevant here to give a bit of explanation why we have chosen to use the term ‘economic remake’ instead of economic revival or economic recovery.
Revival would mean that there was something that collapsed and it is being revived now. Recovery would mean that something declined or diminished for whatever reason and it is bouncing back now. On the other hand, remake means the making of a new or different version of something. Remake is also synonymous with reconstruct, transform, revise, renew, redo, etc.
The pre-war economy of Afghanistan didn’t have any features that would make it compatible and competitive in today’s connected and fast moving world. Therefore, what Afghanistan needs in the post-war scenario is the remake of its economy, not revival or recovery.
Let’s take this concept a step further.
Turkmenistan is the author of two mega corridors that include Afghanistan – TAPI Corridor and Lapis Lazuli Corridor.
These two are not mutually exclusive corridors. The TAPI Corridor connects South Asia with Afghanistan and Turkmenistan. The Lapis Lazuli Corridor connects Afghanistan with Turkmenistan, Azerbaijan, Georgia, and Turkey. Together, these two corridors afford seamless connectivity in the entire Eurasian landmass.
Okay. If there is the connectivity, how does it benefit Afghanistan when Afghanistan has hardly anything to export except for some dry fruit and other such items that cannot fetch the foreign exchange necessary to run the country?
The answer is that the transit potential of Afghanistan is a hot commodity in itself. This is the idea behind Turkmenistan’s drive to create two major corridors with the participation of Afghanistan.
As soon as the peace becomes obtainable, Afghanistan can start making profit by providing the transit space through these corridors. Together with this, when the TAPI components such as natural gas, electricity, fiber optic link etc. are fully available to Afghanistan, the remake of the economy can start according to the aspirations and abilities of its people.
With this in mind, now let’s summarize the contents of the answers given by Meredov, the deputy prime minister and foreign minister of Turkmenistan:
Among the objects inaugurated on 14 January 2021, there is the power transmission line from the Kerki city of Turkmenistan to the Shibirgan city of Afghanistan. This is part of the TAP 500 (Turkmenistan-Afghanistan-Pakistan) power transmission network.
In order to stimulate the economic activity in Afghanistan, the price of electricity has been reduced from 6 cents to 3.5 cents per kilowatt hour.
The opening of the Kerki-Shibirgan power line has tripled the transmission capacity electricity from Turkmenistan to Afghanistan. Now, the electricity from Turkmenistan is serving all the provinces of Afghanistan bordering with Turkmenistan and also some other areas. In all, about 9 million of Afghans are benefiting from electricity from Turkmenistan. This is just the first phase of the power supply plan to Afghanistan, and ultimately Pakistan.
In the second phase, which will start by 2022, the electricity from Turkmenistan will reach Puli-Khumri and Kabul, with planned access to the border of Pakistan.
The other object opened on 14 January 2021 was the 30km Akina-Andkhoi railway line. This is the extension of the Kerki-Imamnazar-Akina railway line that was opened some years ago.
If Afghanistan is connected to the railway system of Turkmenistan it means that Afghanistan is automatically connected to the railway networks of Central Asia, Iran, Russia, China, and Europe.
With the plans for 173km Torgondi-Herat railway line, Afghanistan will gain great capacity to make use of the TAPI and Lapis Lazuli Corridors.
The ground work on the TAPI gas pipeline and the TAP electricity and fiber optic link will start in Afghanistan in August 2021.
The ceremonies are already being planned for the start of ground work on these projects.
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Since TAPI gas pipeline is the flagship project of the TAPI Corridor, it is useful to give here some basic details:
The Turkmenistan – Afghanistan – Pakistan – India (TAPI) gas pipeline project aims to bring natural gas from the Gylkynish and adjacent gas fields in Turkmenistan to Afghanistan, Pakistan and India. The ADB is acting as the facilitator and coordinator for the project. The feasibility study, proposed to lay a 56-inch diameter 1,680 KM pipeline with design capacity of 3.2 billion cubic feet of natural gas per annum (Bcfd) from Turkmenistan through Afghanistan and Pakistan up to Pak-India border.
- Gas Volume: 3.2 billion cubic feet of natural gas per day (Bcfd)
- Gas Supplier: Turkmenistan
- Gas Buyers: Afghanistan (500 MMcfd), Pakistan (1,325 MMcfd) and India 1,325 MMcfd)
- Supply Source: Gylkynish and adjacent gas fields
- Pipeline Dia: 56-Inch
- Proposed Route: Supply Source: Heart – Kandahar – Chamman – Zhob – DG Khan – Multan – Fazilika (Pak-India Border) with total Length of 1,680 KM
Status of Agreement
Intergovernmental Agreement (IGA): Signed by the Head of States of all the member countries on 11th December 2010.
Gas Pipeline framework Agreement (GPFA): Signed by respective petroleum ministers of four countries on 11th December, 2010.
Gas Sale and Purchase Agreement (GSPA): Turkmenistan-Pakistan and Turkmenistan-India bilateral GSPAs were signed by the heads of respective commercial entities on 23rd May 2012. Turkmenistan-Afghanistan signed the bilateral GSPA on 9th July 2013.
Transit Fee Arrangement: Parties agreed to a transit fee figure with consensus on 17th April 2012.
Transaction Advisory Services Agreement (TASA): TAPI Parties and ADB signed TASA on 19th November 2013 at Ashgabat-Turkmenistan.
Operations Agreement: Signed by all four TAPI countries on 9th July 2014.
Shareholders Agreement: After resolution of all issues, Shareholder Agreement has been Signed by the Parties on 13th December 2015.
Investment Agreement: signed on April 7th 2016.
Gas Transportation Agreement: Draft agreement is circulated by Transaction Advisor and is under negotiations between TAPI Parties.
Pipeline System Rules: Draft agreement is circulated by Transaction Advisor and is under negotiations between TAPI Parties.
Stone Laying: December 2015
TAPI Pipeline Company Limited (TPCL): TPCL has been incorporated in Isle of Man on 11th November 2014.
Completion of Technical Studies and Preparation of Information Memorandum: With the above mentioned agreements in place and some under negotiations, the Asian Development Bank (ADB) as Transaction Advisor has completed its work with different technical studies required for the preparation of Information Memorandum/Bidding Documents.
Selection of Consortium Leader: Initially Turkmen Party was negotiating with different IOC to be potential Consortium Leader. However, in the 22nd TAPI Steering Committee (SC) meeting held on 6th August 2015 in Ashgabat, breakthrough was achieved when Turkmenistan proposed itself as Consortium Leader and SC unanimously endorsed State Concern “Turkmengaz” as the Consortium Leader of TAPI Pipeline Company Limited.
Establishment of TPCL Project Office: The project office of TPCl has been established in Dubai and the company has been made operational. Turkmenistan being the Consortium Leader is heading the company.
Stone laying ceremony of the Project held in Turkmen city of Mary near the Galkynysh natural gas field on 13th December 2015 and was attended by President of Turkmenistan Gurbanguly Berdimuhamedov, Prime Minister of Pakistan Nawaz Sharif, President Afghanistan Ashraf Ghani Ahmadzai and Vice – President of India Mohammad Hamid Ansari.
Pre-FID Activities: In pursuance of the TAPI Investment Agreement, TPCL appointed the Technical Consultant who has completed the FEED work in Afghanistan & Pakistan.
TAPI Route Approval: The TAPI Route approval (Pakistan Section) has been accorded by the authorities in November 2018.
Host Government Agreement: Heads of Terms (HoT) of Host Government Agreement (HGA) has been signed by Pakistan and Turkmenistan in March 2019.
Approval of environmental Authorities: Environmental Permit issued by Punjab and Baluchistan Province Environmental Protection Agencies in July 2019 and August 2019 respectively.
Land Acquisition: Field-works have been completed in April 2019.
First Gas Flow Target: FY 2023-24 /// nCa, 19 January 2021
To be continued . . .