Last
week, the cabinet led by Prime Minister Narendra Modi
approved the framework for India’s participation in developing Iran’s Chabahar
port with an investment of $85.21 million, clearing the decks for two of the
country’s biggest state-owned ports to venture overseas for the first time.
According
to plans, Jawaharlal Nehru Port Trust and Kandla Port Trust will form a joint
venture (JV) or an appropriate special purpose vehicle to lease two fully
constructed berths in the first phase of the Chabahar port project for 10
years, which could be renewed by “mutual agreement”. The JV will invest the
money for equipping the two berths within 12 months, one as a container
terminal and the second as a multi-purpose cargo terminal.
The
Indian side will transfer ownership of the equipment to be provided through the
investment to Iran’s Ports and Maritime Organisation (P&MO) without any
payment at the end of the 10th year. The Indian and Iranian sides could enter
into subsequent negotiations for participation in the construction, equipping
and operating of terminals in phase-II development of Chabahar port on a build,
operate and transfer (BOT) basis, subject to the Indian side’s satisfactory
performance in phase I. The
Iranian side will make efforts to provide free trade zone conditions and
facilities at the port. India has decided to invest in developing Chabahar
port, which is considered strategically and economically important for the
country’s exports to landlocked Afghanistan.
"We are setting up a port in Chabahar, Iran. We
will complete the port in about one-and-a-half years," Road Transport and
Shipping Minister Nitin Gadkari said here. The port will be used to ship crude
oil and urea, saving the country in transportation cost. "If we produce
urea there then we can get urea at 50 per cent lesser cost and would not need
to provide subsidy on it," he said. The port of Chabahar in southeast Iran
is central to India's efforts to open up a route to landlocked Afghanistan
circumventing Pakistan.
Chabahar
is also closer to India than the existing Iranian port at Bandar Abbas, which
is about 380 nautical miles away from Chabahar. India’s presence at the
Chabahar port—which lies outside the Persian Gulf and is easily accessed from
India’s western coast—would give it a sea-land access route into Afghanistan
through Iran’s eastern borders.
Though
the opportunity to develop Chabahar port has come through a
government-to-government agreement between the two nations, it is a foundation
that has the potential to propel India’s state-owned ports to look for a larger
footprint globally.
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