Qatar to Invest in Iran’s Southern Ports

EghtesadOnline: Qatar plans to invest in the development of southern ports of Iran to help expand economic cooperation and increase bilateral trade, the director of Qatar Ports Management Company said at a press conference in Bushehr earlier this week.

News ID: ۷۸۲۳۵۷

17 April 2018

“Qatar has long-term plans to increase trade ties with Iran and invest in its southern ports, which have an economic advantage for both countries … We firmly seek expansion of bilateral relations and nothing can change our strategic decision for expanding ties with Iran,” Mohammad Al-Khanji was also quoted as saying by Iran’s Ports and Maritime Organization’s website.

Qatari Delegation

A delegation of high-ranking officials from Qatar’s Ports Management Company recently visited Iran’s southern ports and met their Iranian counterparts. They toured Bushehr and Khorramshahr, as well as Imam Khomeini and Shahid Rajaee ports.

The value of trade between Iran and Qatar hit $275 million in the last fiscal year (March 2017-18), marking a 137% increase compared with the year before. Iran’s exports to the Persian Gulf state reached $248 million to register a 140% growth, Financial Tribune reported.

Qatar has been drawing closer to Iran economically, as Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani said back in September, since a number of Arab states led by Saudi Arabia abruptly severed diplomatic relations with Doha early June and imposed a blockade on the Persian Gulf country, accusing it of supporting terrorist groups.

The Qatari government has denied the accusation, blasting the blockade as unjustified and a violation of international law.

At present, two southern ports of Bushehr and Lengeh account for the largest portion of goods sent from Iran to Qatar. However, Qatari officials seek stronger ties with all the Iranian southern ports.

“Each of the Iranian ports have their own advantage … We will use each port’s services based on our demands,” Al-Khanji said on the sidelines of the Qatari delegation’s visit to Shahid Rajaee Port.

He noted that Qatar’s Hamad Port and Iran’s Shahid Rajaee Port will soon sign an agreement to start collaboration.

Shahid Rajaee Port Potential

Located 23 kilometers west of the port city of Bandar Abbas, the capital of Hormozgan Province, Shahid Rajaee Port is Iran’s biggest container port at the mouth of the Strait of Hormuz.

President Hassan Rouhani broke ground on Phase 3 of Shahid Rajaee Port in February.

“Upon the completion of the terminal within three years, the port’s capacity will increase to 8 million TEU,” Daryush Baqer Javan, the director general of Hormozgan Roads Maintenance and Transportation Organization, said.

“About 10,000 billion rials ($222 million) will only be invested in improving the infrastructure of the port.”

Over half of Iran’s commercial trading is carried out in Shahid Rajaee. The port complex also accounts for over 85% of all container throughput in the country.

The Qatari delegation also showed interest in investing in Khorramshahr Port (Arvand Free Trade Zone) located in Khuzestan Province near Iraqi border. Local firms welcomed the plan, hoping that they could move operations from Dubai, where they are mistreated, to ports in Qatar.

The Qatari official added that revising tariffs is also vital for boosting trade between Tehran and Doha.

Hormozgan Province, where Shahid Rajaee is located, has 32 active ports, including Shahid Bahonar, Jask, Lengeh, Tiab, Aftab and Kish, which act as backups to Shahid Rajaee.

Negin Island: A Golden Opportunity

Among all the southern ports of Iran, Negin Island Port in Bushehr is arguably the best opportunity for Qatari investors.

Negin is a small sedimentary natural island near Bushehr city in southern Iran. Authorities are planning to turn the island into a maritime hub through port construction.

The loading and unloading capacity of Bushehr Port, which is currently 7 million tons per annum, is expected to reach 15 million tons following the construction of three important projects on Negin Island.

The dredging project of the container berth of Negin Island to allow the docking of 50,000-ton vessels has recently begun with an initial investment of 210 billion rials ($5 million).

Nourollah As’adi, caretaker of Ports and Maritime Organization of Bushehr Province, said that with the completion of Bushehr development project on Negin Island in four months, Bushehr container loading and unloading capacity will increase to 600,000 TEUs.

This is twice its current capacity, making it the country’s second biggest container port after Shahid Rajaee Port in Hormozgan Province.

On an official trip to the southern province of Bushehr, President Rouhani in January 2015 launched the construction of a long-awaited seaport on Negin Island, as part of the Bushehr port development project.

The director of Bushehr Province’s ports made the proposal to the Qatari delegation to invest on this island during their visit last week.

Private Sector Cooperation

Welcoming the recent measures taken by port officials of the two countries for expansion of cooperation, Iranian private firms have announced their readiness to play a bigger part in mutual relations of the two countries.

“The private sector is the executive arm of the governments, so Iran and Qatar must provide conditions to activate this sector,” said Masoud Polmeh, the chairman of Shipping Association of Iran.

He believes that the engagement of private sector companies could help reduce costs of conducting Iran-Qatar trade.