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India pins hope on lifting of US sanctions

P Manoj Mumbai | Updated on July 02, 2021

Iran’s move to open up to investments from China in the development and operation of Chabahar port will have an adverse impact on India’s interest in the port

‘Government needs to act quickly or risk losing the initiatives taken so far’

Since last September, the government has been hoping to buy four ship-to-shore cranes for the Chabahar port, as well as a full-time managing director for the State-owned company – tasked with developing and running the port in Iran.

Lack of clarity

A tender floated by India Ports Global Ltd to buy four new rail mounted quay cranes (RMQC’s) of 65 tonne capacity each, for loading and unloading containers at Chabahar port has been repeatedly extended. Potential suppliers are unsure about participating in the auction due to lack of clarity over exemptions to the port project from the US sanctions on Iran.

The time extension has been granted as talks are underway in Vienna, led by the European Union, and including Russia and China, to broker an agreement between the US and Iran to revive the 2015 nuclear deal that would help lift the sanctions on Iran.

India is hoping for the sanctions to be lifted at the earliest to move ahead with the project, a government official said.

‘China’s role growing’

The Ministry of Ports, Shipping and Waterways has entrusted Harjeet Kaur Joshi, chairperson and managing director of Shipping Corporation of India Ltd with the additional role of managing director of India Ports Global after the previous incumbent demitted office on September 18. “Iran’s move to open up investments from China in the development and operation of Chabahar port will have an adverse impact on India’s interest in the port,” said a person tracking the project. “India needs to act quickly or risk losing the initiatives taken so far,” he said. “Whoever presses the pedal now will surge ahead. Unfortunately, the government doesn’t seem to have the vision,” he added.

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 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.

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 development of regional maritime transit traffic to Afghanistan and Central Asia.

The project has been bogged down by delays due to the US sanctions. Though the ten-year operation period is yet to start, India and Iran have operationalised the port partially in the so-called zero period given the challenges over financing the purchase of key cargo handling equipment such as RMQC.

Published on May 04, 2021

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