India to Put Chabahar Railroad Link on Fast Track

EghtesadOnline: Questioning the seriousness of India’s intent, Iran has sought a firm commitment from New Delhi that the construction of the $1.6 billion rail link from Chabahar Port will be taken up expeditiously.

News ID: ۷۷۸۷۳۹

23 August 2017

According to two informed people quoted by the Indian newspaper Mint, India has promised to remove hurdles to fast track the project, which will connect the port on the southern coast of the Persian Gulf nation to the eastern city of Zahedan on the border with Afghanistan.

The issue came up for discussion during the visit of Indian Minister for Road Transport, Highways and Shipping Nitin Gadkari to Iran for the swearing-in ceremony of President Hassan Rouhani, the two people said, requesting anonymity.

“The minister has ordered to take up the matter with IRCON [IRCON International Ltd, the state-run company to which the contract was given] on priority and sort out the matter,” an Indian government official, one of the two cited above, said.

According to Financial Tribune, India plans to develop Chabahar Port, which would give it access to landlocked Afghanistan and energy-rich Central Asia through its Jawaharlal Nehru and Kandla ports on the west coast, circumventing Pakistan.

But the agreement to build the 500-km rail link lapsed in April.

“During deliberations, the Iranian government asked the Indian delegation if it was serious about building the rail link as no efforts seem to have come up,” said the second person, also an Indian government official.

In May 2016, India and Iran inked 12 agreements, including one for India’s IRCON to build the 500-km railroad as part of a transit corridor to Afghanistan. The agreements were signed in the presence of Indian Prime Minister Narendra Modi during his visit to Iran.

“They complained that the agreement had lapsed and IRCON hasn’t informed if it has managed to arrange for the funds for the rail project. The Indian delegation sought time and assured the Iranian government about India’s commitment,” the second official cited above said.

India has already built a 218-km road link connecting Delaram with Zaranj in Afghanistan, which is adjacent to the border with Iran. Chabahar Port, located in Sistan-Baluchestan Province on Iran’s southeastern coast, will also promote India’s strategic interests in the Persian Gulf and Strait of Hormuz.

Experts say procedural issues should be resolved fast by India to leverage the opportunity that Iran offers.

“There is a positive movement. The Indian government is very focused on its intent to move forward on Chabahar Port, which is a strategic project and forms an integral part of the International North-South Transport Corridor. We will have to sort out the procedural issues and sustain the momentum,” said Meena Singh Roy, a research fellow at New Delhi-based Institute for Defense Studies and Analyses.

Chabahar can be leveraged by India for INSTC, which will connect the Indian Ocean and the Persian Gulf with the Caspian Sea through Iran and then onwards to St. Petersburg in Russia and northern Europe. China for its part is pushing for its ambitious “One Belt, One Road” initiative aimed at connecting around 60 countries across Asia, Africa and Europe.

“There has to be fast movement on the commitments made. This time there is push from the top. If we don’t sustain the momentum, the opportunity will not wait for us,” Roy added.

Indian projects in Iran have been facing inordinate delays. An Indian consortium comprising ONGC Videsh Ltd, Indian Oil Corp. Ltd and Oil India Ltd that won a bid for the Farsi block in 2002 from National Iranian Oil Company is yet to secure the development rights.

Queries emailed to the spokespersons of Iranian Embassy in New Delhi, IRCON and India’s ministries of shipping and external affairs on August 11 remained unanswered.

Interestingly, China’s ZPMC has won a contract to supply cranes to Chabahar Port, The Hindu Business Line reported on August 11.

Chabahar Port, located in the Sea of Oman near Iran’s border with Pakistan, is less than 100 km from Pakistan’s Chinese-constructed Gwadar Port, part of a project to open up an energy and trade corridor from the Persian Gulf to western China.