India’s presence in the strategically located Iranian port of Chabahar — Delhi’s primary gateway to landlocked Afghanistan — is all set to get a big boost.
Tehran has recently proposed to Delhi to manage phase one of the port built by Iran even as the two sides are still negotiating terms and conditions of Delhi’s role in expanding phase two of the port where the Modi government wants to invest Rs 150 crore, or $235 million. ET has learnt that Tehran has offered Delhi management rights for two years for phase one of the port and such rights could be renewed by another decade.
But port management proposal is not just only development regarding Chabahar Port, there will be hectic activities with a trilateral meeting being planned between Iran-India-Afghanistan on operation of Chabahar Port in May. Last year, the three sides had signed an agreement for operation of Chabahar Port.
Besides, a summit to attract investments for the Special Economic Zone in the port complex will be held mid-May in Iran. Delhi-Kabul-Tehran could also hold trilateral consultations on the future of Afghanistan soon with Indian foreign secretary S Jaishankar planning to visit Tehran in the future close on the heels on series of consultations organised by Moscow on dealing with the Afghan situation and use of Mother of All Bombs by the USA against the ISIS. The visit of the US NSA to India also provided India an opportunity to understand Washington’s plan for the landlocked country.
Incidentally these meetings in Iran are expected to occur ahead of the presidential polls where the incumbent Rouhani is seeking re-election.
India’s allotment of $235 million for phase two of Chabahar is divided into two parts — $150 million Line of Credit (LoC) from the EXIM Bank for development of port complex and $85 million — allotted later following contract between the two sides for supply of equipment to develop two berths in the port complex.
A Special Purpose Vehicle has been created by the Indian shipping ministry for development of phase two of the port. On the Iranian side, Ports and Management Organisation is the nodal authority for implementing the project. India has been given the rights to operate two berths and few terminals in this phase two of the port.
Adani Ports & Special Economic Zone Ltd. operator of India’s largest port, and Essar PortsBSE 0.15 % are among the companies that have expressed an interest in managing and operating two terminals at Chabahar. JM Baxi Group, known in India for its chartering, broking and other shipping services, has also shown interest. The India Ports Global Limited, the company mandated to drive India’s investments in overseas, on March 17 invited firms to express interest if they want to be considered for a strategic partnership.
India has been negotiating with Iran for releasing initial tranche from $150 million worth LoC ever since MoU was signed with Shipping Minister Nitin Gadkari’s visit to Tehran in May 2015 weeks before the Persian Gulf country signed the landmark nuclear deal with the global powers. The contract between the two countries for developing the port — that will rival Pakistan’s Gwadar Port –was finalised when the Indian PM visited Tehran in May 2015.
This strategic port will allow India to circumvent Pakistan and access Afghanistan and Central Asia directly via sea. India is also constructing railway line between Chabahar and Zahedan to connect Port to rest of the Iranian railway network.