The Government has approved the formation of the special purpose vehicle (SPV) and has allowed the public sector, Gas Authority of India Ltd (GAIL) to join it. This decision was taken at the meeting of the Union Cabinet presided over by the Indian Prime Minister Dr Manmohan Singh here on Thursday.

GAIL has agreed to make an investment up to $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.

TAPl Ltd. is required to have an initial contribution of $20 million that is $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.

Based on an `in-principle` approval of the Union Cabinet on May 18, 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.

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 September 23, 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 TAPl pipeline 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.