Logistics

Indian firm to develop Iran’s Chabahar Port

Our Bureau New Delhi | Updated on October 19, 2014 Published on October 19, 2014

Plans $85 million investment



An Indian joint venture company will develop the Chabahar Port in Iran with an investment of $85.21 million (around ₹520 crore) and operate the port for 10 years through a leasing agreement. The pact can be renewed with mutual agreement at the end of the 10th year. The JV was given the go-ahead by the Union Cabinet on Saturday.

Jawaharlal Nehru Port Trust (JNPT) and the Kandla Port Trust (KPT) can have an Iranian partner and/or an Indian private sector partner to form the vehicle to execute the project.

The port would give India a sea-land access route to Afghanistan through Iran’s eastern borders. This will be the framework for inter-Governmental memorandum of understanding, to be finalised by India and Iran.

The Cabinet also approved an annual revenue expenditure of $22.95 million to support the JV.

Specifically, the JV will lease two fully constructed berths in Chabahar port’s phase-I project for 10 years, which could be renewed by “mutual agreement”, said an official release.

The JV will invest $85.21 million for equipping the two berths within 12 months as a container terminal and the second as a multi-purpose cargo terminal.

India will transfer ownership of the equipment to Iran’s Port and Maritime Organisation (P&MO) without any payment at the end of the 10th year. The Indian side can form the JV with one or more Iranian companies, subject to the approval of the P&MO.

Both countries could enter into subsequent negotiations for participation in building, equipping and operating the terminals in the phase-II on a BoT (build–operate–transfer) basis, subject to the Indian side’s satisfactory performance in the phase-I. Iran will make efforts to provide Free Trade Zone conditions and facilities.

Chabahar port, located in the Sistan-Baluchistan Province on Iran’s south-eastern coast, is of strategic utility for India. It lies outside the Persian Gulf and is easily accessed from India’s western coast.

From Chahbahar port, using the existing Iranian road network, one can link up to Zaranj in Afghanistan, which is 883 km away from the port and then using the Zaranj-Delaram road constructed by India in 2009 one can access Afghanistan's garland highway, thereby establishing road access to four of the major cities of the country—Herat, Kandahar, Kabul and Mazar-e-Sharif.

Published on October 19, 2014
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