India on Monday signed a much-awaited contract with Iran to develop the country’s southeastern Chabahar port – a project which is expected to eventually create a regional trade, investment and transportation hub with links from the Indian Ocean to Central Asia.
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The deal - that has already been described as historic - was signed in a ceremony supervised by Iran’s President Hassan Rouhani and the visiting Indian Prime Minister Narendra Modi.
It was sealed between India Ports Global Private Limited (IPGPL) and Iran’s Ports and Maritime Organization (PMO).
Accordingly, the IPGPL will develop two terminals and five multi-cargo berths in Phase-1 of the Chabahar port project. India’s investment in phase-1 will be about $500 million.
"The bilateral agreement to develop the Chabahar port and the related projects, and availability of about $500m from India for this purpose, is an important milestone,” Prime Minister Modi has been quoted as saying by the media after the ceremony to sign the Chabahar deal. “This major effort would boost economic growth in the region," he added.
Iran’s President Rouhani for his part lauded India’s decision to take up the project and said it presented the symbol of cooperation between the two countries.
"Considering all the credit lines that are going to come from India into the Chabahar port, it can very well turn into a very big symbol of cooperation between the two great countries of Iran and India," Rouhani has been quoted as saying by the media.
From Chabahar port, the existing Iranian road network can link up to Zaranj in Afghanistan, about 883 km from the port. The Zaranj-Delaram road constructed by India in 2009 can give access to Afghanistan's Garland highway, setting up road access to four major cities -- Afghanistan-Herat, Kandahar, Kabul and Mazar-e-Sharif, India’s media reported.
Chabahar will be used to ship crude oil and urea, saving India transportation costs. India intends to lease two berths at Chabahar for 10 years. The port will be developed through a special purpose vehicle (SPV) which will invest $85.21 million to convert the berths into a container terminal and a multi-purpose cargo terminal.
The deal to develop Chabahar was part of a series of 12 agreements that India and Iran signed to increase cooperation in various areas.
Meanwhile, India’s Minister of Road Transport, Highways and Shipping Minister Nitin Gadkari has been quoted as saying that the agreements that the two countries have signed envisage investments of billions of dollars by New Delhi in setting up industries -- ranging from aluminum smelter to urea plants -- in Iran's Chabahar free trade zone.
Gadkari has been quoted by the media as saying that India’s Nalco will set up the aluminum smelter while private and co-operative fertilizer firms are keen to build urea plants provided they get gas at less than $2 per mmBtu. He has also added that Railway PSU IRCON will build a rail line at Chabahar to move goods right up to Afghanistan.
Complementing the agreement over Chabahar will be the signing of a trilateral deal on transport and transit corridor among India, Afghanistan and Iran.
