Logistics

Chabahar port project boxed in a corner

P Manoj Mumbai | Updated on November 21, 2021

India and Iran have operationalised the port partly through an annual short-term contract in the so-called zero period

India’s plan to erect cranes delayed as suppliers hesitate to participate in tender

The crisis being faced by India’s strategic port project at Chabahar in Iran has deepened after crane-makers failed to turn up for a tender to supply four new ship-to-shore cranes to the port while the country’s external lending arm is yet to disburse a $150 million line of credit to Iran for developing the port.

To add to the woes, Captain Alok Mishra, the executive picked by the Appointments Committee of the Cabinet (ACC) to be the new Managing Director of India Ports Global, the State-owned entity tasked with developing and running the strategically important and India-funded port, has declined to accept the job, government sources briefed on the development said.

India’s plan to erect four new rail mounted quay cranes (RMQCs) at Chabahar port has been delayed by at least four years as crane-makers stayed away from participating in a tender due to sanctions imposed on Iran, forcing India Ports Global to extend the bid deadline 20 times since it was issued in September last year. The latest deadline ended on November 18.

“Due to the US sanctions, we are not getting any manufacturer/supplier to participate in the tender,” the source said, adding that the government was in a fix on what to do next.

Though the main ten-year port operation period is yet to start, India and Iran have operationalised the port partly through an annual short-term contract in the so-called zero period given the challenges in purchasing the key cargo handling equipment.

RMQCs play a vital role in loading and unloading cargo containers to and from ships. Starting the ten-year contract without these canes is considered meaningless.

$150-million loan to Iran

That aside, the disbursal of the $150 million loan to Iran for developing the port is one of the main conditions for the activation of the ten-year port operations deal signed between the two nations.

In February 2016, the Union Cabinet had cleared the $150 million loan to Iran through EXIM Bank, but the lender is said to be “reluctant” to disburse the funds citing problems associated with the US sanctions on Iran.

On September 27, the ACC cleared the candidature of Mishra for a five-year term, a year after the previous incumbent demitted office. Mishra is currently the Head Operations at Gateway Terminals India (GTI), one of the five container handling facilities operating at Jawaharlal Nehru Port Authority.

BusinessLine could not independently ascertain why Mishra declined the job. Located in the Sistan-Baluchistan Province on Iran’s south eastern coast (outside Persian Gulf), Chabahar port gives India a sea-land access route into Afghanistan and Central Asia through Iran’s eastern borders. The project is considered a strategic venture for the development of regional maritime transit traffic into Afghanistan and Central Asia.

India Ports Global and Aria Banader Iranian Port & Marine Services Company (ABI) of Iran signed a deal in May 2016 to equip and operate the container and multi-purpose terminals at Shahid Beheshti – Chabahar Port Phase-I with a capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease. Cargo revenues collected will be shared by India and Iran as per an agreed formula.

The take-over of Afghanistan by Taliban, though, has become an added concern for India.

Published on November 21, 2021

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