India to Officially Start Operations at Chabahar Soon

EghtesadOnline: Managing Director of Ports and Maritime Organization of Iran Mohammad Rastad said India will officially begin the $85 million investment it has committed in Chabahar Port soon.

News ID: ۷۸۳۴۲۵

28 July 2018

He made the statement during a visit by officials of the Ministry of Roads and Urban Development to the southern strategic port located in the province of Sistan-Baluchestan on Thursday.

Tehran, New Delhi and Kabul signed a trilateral agreement to develop Chabahar in Tehran in May 2016, when Indian Prime Minister Narendra Modi and Afghan President Ashraf Ghani paid a state visit to Iran.

The deal stipulates the development and operation of two terminals and three berths at the port with cargo handling capacities for 10 years, Financial Tribune reported.

Based on the agreement, Iran is to provide land in Chabahar Special Economic Zone to Indian companies for setting up petrochemical, fertilizer and other gas-based industries.

Chabahar Port located in Sistan-Baluchestan Province on the southeastern coast is of great importance to India. It will provide India an alternative and reliable access route into Afghanistan, bypassing Pakistan. This would also give India access to resource-rich Central Asia.

As per the memorandum of understanding signed between India and Iran in May 2016, India would equip and operate two terminals in Chabahar Port's Phase I with a capital investment of $85.21 million and annual expenditure of $22.95 million on a 10-year lease.

In February, Iran said it had agreed to lease operational control of Chabahar, located on the Sea of Oman, to India for 18 months.

> Sanctions Won't Hinder Chabahar's Development

The United States’ sanctions on Iran won’t affect India’s activities in Chabahar Port, the chairman of Export Promotion Council for India’s Export-Oriented Unit and Special Economic Zones, told IRNA on Tuesday.

According to Vinay Sharma, the US sanctions include trade and business as well as goods and services sectors while Chabahar is a transportation hub.

“No sanctions against transportation from Iran to Central Asia are expected to be issued, so the Chabahar project will not be affected by these threats," he added.

Referring to India’s future activities in Chabahar Port, Sharma noted that every nation is seeking to protect its own interests and India does so despite US sanctions.

Chabahar is Iran’s only oceanic port town and consists of two separate ports named Shahid Kalantari and Shahid Beheshti.

President Hassan Rouhani inaugurated the first phase of Shahid Beheshti Port in the presence of some 70 visiting dignitaries from 17 countries in December.

The inauguration of the first phase (out of five phases defined for the project) has tripled its capacity to 8.5 million tons (equal to that of all the northern ports of the country) and will allow the docking of super-large container ships (between 100,000 DWT and 120,000 DWT) and increase India’s connectivity with Afghanistan.

Rastad said the throughput of Chabahar’s two ports increased by 77% in the first four months of the current Iranian year (March 21-July 22) compared with the corresponding period of last year.

“So far this year, port-related activities in Chabahar have also increased by 27% compared to the same period of last year,” he said, adding that revenues generated by Iranian ports are estimated to reach 26 trillion rial ($590.9 million) by the fiscal yearend (March 20, 2019).

> 4 Contracts Worth $41.8m, One $150m MoU

Four build-operate-transfer (BOT) contracts worth 1.84 trillion rials ($41.8 million) with private sector companies and a memorandum of understanding on the construction of a mini-refinery worth $150 million were signed with a foreign investor in Shahid Beheshti Port.

The deals were signed by the Ports and Maritime Organization of Iran and companies of the private sector on Thursday.

The refinery will have a gasoline, diesel and mazut production capacity of 14,000 barrels per day.

BOT projects are normally large-scale, greenfield infrastructure projects that are financed, built and operated solely by the government.

According to Behrouz Aqaei, director general of Ports and Maritime Organization of Sistan-Baluchestan Province, the BOT contracts include the construction of a petroleum reservoir worth 980 billion rials ($22.27 million), a liquefied petroleum gas reservoir worth 530 billion rials ($12.04 million), a multi-purpose storage house worth 128 billion rials ($2.9 million) and a project to collect ships’ waste and cargo residues worth 195 billion rials ($4.43 million) over a period of 20 years.

> Chabahar-Zahedan Railroad

India has agreed to build a 500-km railroad from Chabahar to Zahedan, the provincial capital of Sistan-Baluchestan, close to the Afghan border. India’s state-owned IRCON has agreed to build a rail route at a cost of $1.6 billion as part of the transit corridor to Afghanistan.

After connecting Chabahar to Zahedan, the railroad will be linked to Zaranj in Afghanistan. Hence, when the Afghan cargo arrives in Zahedan, it can be transported by a 1,380-km railroad to Chabahar and then shipped to India.

Calling for prioritizing the construction of the railroad linking Chabahar to Zahedan on the Iran-Afghanistan border and construction of Chabahar Ringroad, Aqaei noted that Shahid Beheshti port won’t be considered a competitive port in the region to attract Afghanistan’s transit of minerals unless it is connected to the Trans-Iranian Railroad.

At present, Chabahar-Zahedan Railroad, which consists of a 310-kilometer rail line from Chabahar to Iranshahr and a 310-kilometer rail line from Iranshahr to Zahedan is 33% complete, said deputy head of Construction and Development of Transportation Infrastructures Company, Abbas Khatibi.

“An estimated 45 trillion rials ($1.02 billion) are needed to complete Chabahar-Zahedan Railroad, of which 10 trillion rials ($227.27 million) have been provided so far,” he added.

> Iran’s 1st Fully Mechanized Mineral Export Terminal

On top of these agreements, the visiting delegation broke ground on the construction of Iran’s first fully mechanized mineral export terminal at Shahid Beheshti Port and the operation of two grain suction systems.

The terminal, with a mineral export capacity of 15 million tons per year, will come on stream in two years with an investment of 2.8 trillion rials ($63.6 million) by LTP Company and create 75 direct jobs.

According to the company’s Managing Director Mohammad Arazesh, the new “smart” terminal will be able to accommodate 100,000-ton cargo ships and vessels.

It will be constructed to the north of the coastal protection wall and east of Shahid Beheshti Port’s Berth No. 5. The terminal will be able to receive two ships simultaneously.

According to LTP’s website, the terminal will rely on machinery such as two wagon tippler stations each with a 25-wagon/hour capacity; truck loading and unloading depos with 67 trucks/hour capacity; stockyard containing a stacker with 2,500 tph capacity, a boom-type reclaimer with 2,500 tph capacity, and two combined stacker/reclaimer with 2,500 tph capacity each; two 2,500 tph ship loaders and a 1,500 tph grab-type ship unloader; as well as an approximately 10-km-long network of belt conveyors.