Asia > Southern Asia > India > Port of Kalantari in the city of Chabahar.

India: Port of Kalantari in the city of Chabahar.

2015/05/07

Notwithstanding US objections, India on Wednesday went ahead with the signing of an agreement with Iran for the development of the strategically significant Chabahar port which will give India sea-land access route to Afghanistan bypassing Pakistan.


The pact was signed next comprehensive talks between visiting road transport and highways minister Nitin Gadkari with the Iranian leadership in Tehran. “The MoU (Memorandum of Considerate) was signed next the talks between the two sides,” a source said.
Iranian President Hassan Rouhani, in his conference with Gadkari, said, “Resumption of Iran-India cooperation in the southeastern Iranian port city of Chabahar would lead to a new chapter in relations of two nations.”


Chabahar port is located in Sistan-Balochistan Province on Iran’s southeastern coast and is of great strategic utility for India which will get sea-land access route to Afghanistan bypassing Pakistan. The US has been asking India and other nations not to “rush” into doing business with Iran as Washington was from presently on to work out a transaction with Tehran on the latter’s contentious nuclear programme.
The port 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 appropriate purpose vehicle (SPV) which will invest $85.21 million to convert the berths into a container terminal and a multi-purpose cargo terminal.


The agreement was signed by Gadkari and Iran’s Minister for Transport and Urban Development Dr Abbas Ahmad Akhoundi. “With the signing of this MoU, Indian and Iranian commercial entities would presently be in a position to commence negotiations towards finalisation of a commercial arrangement under which Indian firms will lease two existing berths at the Port and operationalise them as container and multi-purpose cargo terminals,” a ministry of external affairs statement said.


“The availability of a functional container and multi-purpose cargo terminal at Chabahar Port would provide Afghanistan’s garland road network system alternate access to a sea port, significantly enhancing Afghanistan’s in general connectivity to regional and world markets, and providing a fillip to the ongoing reconstruction and humanitarian efforts in the country,” it said.


Touching upon Iran and India’s ancient and historical relations, Rouhani, in his conference with Gadkari, underscored that undoubtedly the level of mutual cooperation could be expanded day by day. Pointing to Iran’s transit position for connecting east to west and north to south, he stressed that the Islamic Republic could play a pivotal role in connecting India to Central Asia, the Caucasus and Eastern Europe via railway.
President Rouhani reiterated that Iran is fully ready to lure foreign investors. Noting the importance of North-South Transport Corridor and development of Iranian ports, Rouhani stressed that Iran fully welcomes the Indian investors to make investment in construction of roads, railways and development of Chabahar port and other southern ports in Iran.


Referring to the cordial relations between the two nations, Gadkari said New Delhi is fully ready to cooperate with Tehran on development of Chabahar port. Last year in October, India had approved the framework of an inter-governmental memorandum of considerate (MoU) for setting up an $85.21 million joint venture firm for equipping two fully-constructed berths at Chahbahar port. As per the framework, approved in the Cabinet last year, an Indian joint venture company would lease two fully constructed berths in Chahbahar port’s Phase-I project for a period of ten years, which could be renewed by “mutual agreement”.


The Indian side will transfer ownership of the equipment to be provided through the investment to Iran’s port and Maritime Organisation (P&MO) without any payment at the end of the tenth year.

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