India is all set to start operations on a part of the Chabahar Port by May-end on borrowed Iranian equipment, two senior government officials familiar with the matter said.
The internal arrangement to operationalise the port within the next three months is part of the agreement signed during Iranian president Hassan Rouhani’s recent visit to India.
As per the deal, Tehran will lease out operational control of a part of Chabahar Port, to India for 18 months. According to the MoU signed between the two sides in 2016, India will equip and operate two terminals in Chabahar Port Phase-I with capital investment of US$85.21 million and annual revenue expenditure of US$ 22.95 million on a 10-year lease.
However, till India procures the equipment to operationalise the port — the process for which will take some time — a short-term lease contract has been signed to borrow equipment from Iran to start interim operations on a part of the port where the work is complete.
“We will have a foothold in Chabahar by May. This will give a boost to our plans to connect India with Afghanistan and central Asia,” shipping secretary Gopal Krishna said.
Chabahar port will be game changer for India trade, could rival China’s OBOR initiative India is building a container terminal and a multi-purpose cargo terminal with a total waterfront length of 1,240 metres. Of this, it wants to start operation on 360 metres by May-end. “Project Special Purpose Vehicle (SPV) will be in place by March-end. We are in the middle of the process to select the SPV,” said Arun Kumar Gupta, managing director of India Ports Global Private Limited (IPGPL).
IPGPL is a joint venture between Jawaharlal Nehru Port Trust and Kandla Port Trust to develop Chabahar. The port, located in the Sistan-Baluchistan Province of Iran on the south-eastern coast, is of great strategic importance to India. It will provide the country an alternative and reliable route into Afghanistan, bypassing Pakistan, and give it access to resource-rich central Asia.
After his meeting with Rouhani, Prime Minister Narendra Modi had said Chabahar was the “golden gateway to Afghanistan and the central Asian region”.
India, Iran and Afghanistan have already signed a transit agreement for easy passage of Indian goods to their territory.