Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei has authorized the government to withdraw funds needed to complete the railroad project connecting the southeastern port city of Chabahar to the eastern city of Zahedan, both in Sistan-Baluchestan Province, from the National Development Fund of Iran, the country’s sovereign wealth fund.
The announcement was made by Minister of Roads and Urban Development Mohammad Eslami, the news outlet of Iran Chamber of Commerce, Industries, Mines and Agriculture reported.
The 610-kilometer railroad project from Chabahar to Zahedan got off the ground in the fiscal 2010-11, only to come to a halt for three years due to lack of resources. The execution of the project resumed in the year ending March 2015, after a change of contractor.
However, the project has made less than 40% progress, says Abbas Khatibi, the deputy head of Construction and Development of Transportation Infrastructure Company of Iran.
“So far, 17,000 billion rials ($149.12 million) have been invested in the railroad. A total of 40,000 billion rials ($350.87 million) are needed to complete the project,” Khatibi said.
“The project, which includes the Zahedan-Khash-Iranshahr-Chabahar rail route, will be completed in four years and become operational, provided resources are allocated as per the schedule.”
His comments come, as Eslami vowed to inaugurate the project by March 2022.
“With the current funding levels, it would take more than 10 years for the project to come to fruition,” says parliamentarian from Chabahar, Abdulghafour Irannejad.
An estimated 40,000 billion rials (more than $350 million) are needed to connect Chabahar to Iran's rail network whereas the budget law of the fiscal 2018-19 has earmarked only 1,000 billion rials ($8.77 million) for this large-scale project, he added.
India-Afghanistan Connectivity via Chabahar
India has also agreed to contribute to the construction of the railroad from Chabahar to Zahedan.
A memorandum of understanding worth $2 billion was signed by the Railway Ministry of India and Iran last February during Iranian President Hassan Rouhani’s visit to India.
After connecting Chabahar to Zahedan, the railroad will be linked to Zaranj in Afghanistan. Hence, when an Afghan cargo arrives in Zahedan, it can be transported by a 1,380-km railroad to Chabahar and then shipped to India.
India Global Ports Limited has been tasked with administering and running the Shahid Beheshti Port in Chabahar. The entity is planning to invest $500 million over the next 10 years in the port.
When Chabahar is connected to Iran's national rail network, the port will have a bigger share in the Asian transportation market.
IGPL plans to equip Chabahar with special loading and unloading machinery.
Early in January, India’s Shipping Ministry officially announced that the country has officially taken over the operations of strategic Chabahar port
"This step marks the beginning of a long journey. India has written a history with its engagement in Chabahar and is now leading regional cooperation and joint efforts to support landlocked Afghanistan. This is the first time India will be operating a port outside its territories," the Indian government's statement read.
India, Iran and Afghanistan signed a pact in May 2016, which entailed the establishment of transit and transport corridor among the three countries using Chabahar Port as one of the regional hubs for sea transportation in Iran, besides the multimodal transport of goods and passengers across the three countries.
Merchants and businesspeople who use Shahid Beheshti Port will enjoy a 30% discount in customs duties, says CEO of Islamic Republic of Iran Shipping Lines Hossein Modarres Khiyabani, adding that Tehran is determined to encourage operations at the port.
The first phase of Shahid Beheshti Port was inaugurated in December 2017 by Rouhani, opening a new strategic route connecting Iran, India and Afghanistan.
The inauguration of the first phase of Shahid Beheshti Port (out of a total of five development phases), has tripled Chabahar's capacity to 8.5 million tons (equal to that of all the northern ports of the country). It allows the docking of super-large container ships (between 100,000 DWT and 120,000 DWT) and increases India’s connectivity with Afghanistan.
Khiyabani noted that the government has made it mandatory for two major state-run companies to unload and transport their import cargoes via Shahid Beheshti Port’s facilities rather than their traditional destination at Imam Khomeini Port in southwest Iran.
