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Monday, 20 July 2015

India offered expanded role in Iran's Chabahar port project

Iranian officials have offered India a larger role in the development of the Port of Chabahar in return for $8 billion in investment in infrastructure projects, according to the Iran’s ambassador to India, Gholamreza Ansari.

“Connectivity is the main policy of Modi that coincides with Iran’s government policy. We have offered them, in connectivity, $8 billion of projects,” Ansari said.

The Chabahar port project has already garnered a commitment of $85 million from the Indian government and is seen as a rival to China’s recently announced involvement in Pakistan’s Gwadar port.

India is keen to increase its presence at Chahbahar in order to give it a sea-land access route into Afghanistan through Iran’s eastern borders. Located in the Sistan-Baluchistan Province on Iran's south-eastern coast the port should prove to be of strategic importance to India which is keen to open up trade routes to Afghanistan.

While both the Indian and Iranian governments have been strongly supportive of the port project the deal has been frustrated by U.S. sanctions imposed on Iran which have slowed progress.

It is now hoped that the recently signed U.S. brokered nuclear deal with Iran will allow many of these sanctions to be lifted, leading to an accelerated schedule for the port’s development.

“The potential between Iran and India is great but we were just facing such a wall of sanctions, wall of American pressure,” Ansari said, adding that it is a  “golden time” for Indian investors to take advantage of opportunities in Iran’s port sector.

The Indian government is reported to have committed $22.9 million per year for ongoing port operations under a proposal will see the port operated via an Indian JV company, composed of Jawaharlal Nehru Port Trust (JNPT) and the Kandla Port Trust (KPT), which will sign a 10 year leasing agreement.

Details of the role that India will have in running the new port are still to be finalised but the first phase will be developed on a Build Operate Transfer (BOT) basis and a potential phase II expansion of the port is already being considered.

Road links from the port connect Chahbahar to Zaranj some 883 km and from there Afghanistan's garland highway which allow access to for goods to the country’s four major cities; Herat, Kandahar, Kabul and Mazar-e-Sharif.

Iran’s port sector has seen a sharp rise in investor interest as international relations have thawed over the last year. In June, Iranian authorities announced plans for €700 million multi-purpose port on the island of Qeshm in the Strait of Hormuz, which is the world’s most important oil route, providing passage to over 33% of all seaborne traded oil.

The narrow strip of water in the Iranian territories links big oil producers such as Saudi Arabia to the Gulf of Oman and the Arabian Sea and more than 17 million barrels of oil and oil products are shipped through the passage daily. 


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