ADB to Charge $30 Mn 'Success Fee' for TAPI Project Completion

Asian Development Bank (ADB) would charge a ‘success fee’ of $30 million besides a retainer fee of $50,000 per month for helping build the $7.6-billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, says news agency Press Trust of India.

Turkmenistan, Afghanistan, Pakistan and India appointed ADB as transaction adviser late last year. This agreement enables the Bank as transaction advisor to find a leading and technically and financially sound company that could form a consortium to generate the finances for the TAPI gas pipeline.

Press Trust reports, citing sources, that for this, the ADB had initially demanded 1% of the cost as success fee upon a pipeline consortium being set up and its leader assumes responsibility.

After negotiations, the fee was brought down to $30 million. Other than the success fee, ADB will also get a retainer fee of $50,000 every month till such time that a consortium is put and its leader selected, adds Press Trust.

The four nations are looking for an international reputed firm with experience in building and operating cross-country pipeline to lead TAPI pipeline construction consortium. However, the project has not been able to take off as no international pipeline company is willing to implement it unless Turkmenistan gives a share in the gas fields.

The pipeline, which is backed by the US, would originate from Turkmenistan and pass through Afghanistan and Pakistan before entering India. It will have a capacity to carry 90 million standard cubic metres a day gas for a 30-year period and will be operational in 2018.