India, Iran to fast-track Chabahar port development

08 Aug 2017


India and Iran have decided to complete and operationalise the Chabahar port project at the earliest, even as the two countries assessed the progress of the implementation of the decisions taken during Indian Prime Minister Narendra Modi's visit to Iran last year.

India's minister for road transport and shipping Nitin Gadkari who was in Teharan for the swearing-in of the new Iranian government, held wide ranging discussions with his Iranian counterparts on many issues, including India's cooperation in the development of Chabahar Port and the proposed rail link between Chabahar and Zahedan in Afghanistan.

Civil construction work at the Chabahar Port has already started and the Indian government has allocated Rs600 crore for the development of the port. Out of this, tenders worth Rs380 crore for equipment have already been finalised.

Gadkari, who called on Iran's first vice president Dr E Jahangiri, highlighted the issue of activation of contract of Chabahar Port development.

He said India Ports Global Limited (IPGL), which is entrusted with the development of the port, has finalised procurement of critical equipments such as rail-mounted gantry crane (RMGC), and is close to finalising orders relating to rubber tyre mobile crane (RTMC), empty container handlers (MTCH), truck and tractor trailers, containers and related equipments.

He also conveyed India's readiness to aid Iran in taking up operations in Chabahar Port during the interim period between the actual activation of contract. He requested the Iranian side for an early submission of loan application for Chabahar port development to EXIM Bank of India so that the contract agreement between the two countries can be activated.

It may be recalled that the Iranian side had requested India to provide up to $150 million credit and had made it a condition for activation of the Chabahar Port contract. The application for loan to EXIM Bank of India is still awaited.

Gadkari also met the Iranian minister for roads and urban development Dr Abbas Akhoundi and conveyed to him the latest update on procurement of equipment for the two terminals, which include multipurpose and container that are part of the Chabahar Port Agreement. He also sought early completion of loan agreement to facilitate wpork on the project.

The Iranian side has assured that the application will be presented to EXIM Bank of India early.

During the meeting IGPL MD also submitted an application under the Foreign Investment Promotion and Protection Act (FIPPA) to the Iranian authorities . India has also opened an office of IPGL in Teheran.

The Iranian minister is reported to have stressed on the need for marketing of the Chabahar Port to attract cargo. He said, Iran and India should jointly organise a workshop at Chabahar for this purpose at an early date.

Gadkari, meanwhile, emphasised the need to develop rail connectivity from Chabahar to Zahedan, and said that the MoU with India in this regard may be extended.

The issue of ratification of the trilateral transit agreement among India, Iran and Afghanistan was also discussed. While India and Afghanistan have the agreement, Iran is yet to do the same.

Iran's Chabahar port, located in the Sistan-Baluchistan province on the south-eastern coast, is a port of great strategic utility for India.

It lies outside the Persian Gulf and is accessed from India's western coast. As per an MoU signed between India and Iran in May last year, India is to equip and operate two berths in Chabahar Port Phase-I with capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease.

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