The Indian government plans to rope in some of the country’s leading private sector players in the infrastructure field such as Jindal Infrastructures, Essar, SAIL and IRCON to develop the area around Iran’s Chabahar Port.
The plan is to build a free trade zone with the objective of attracting private investments in the first phase of the project. Additionally, India will also be setting up rail connectivity as the project takes off, a top official involved in the facilitation of the project told Indian newspaper The Hindu Business Line.
“It cannot just be a government-to-government project only. Private participation is required. And our companies know that market well, so it will be easier for them to enter there,” the official said.
The railroad will connect the port with Afghanistan and also link India with the entire Central Asian region.
Meanwhile, the plan to develop two berths at the port is underway with India’s Ministry of Shipping negotiating commercial terms with the Iranian government. The $31 billion project once complete will raise the operational capacity of Chabahar to around 86 million tons.
With the lifting of sanctions, Iran will become a lucrative market for India. “We plan to commence talks for a trade pact with them at an early date,” said another official, who refused to be identified.
India’s Ministry of External Affairs has also asked the Shipping Ministry to expedite the talks and start work on the project before Prime Minister Narendra Modi travels to Tehran in early 2016.
Iran has always been strategically important for India. Through Chabahar Port, India will gain access to the south and southwestern Iran with Afghanistan as the transit point.
Recently, India’s Ambassador to Iran Saurabh Kumar stated that investments in the second phase of the development of the berths are being sought. The berths will help import crude oil and urea shipments faster, saving millions of dollars in transactions costs.
The Indian government has already pledged to commit about $85 million to construct container and multi-purpose terminals at Chabahar. Under a broader scheme, India has expressed readiness to invest $30 billion in Chabahar, though New Delhi says it will depend on the price of natural gas India imports from Iran. Iran has offered to supply gas at $2.95 per million British thermal units while India wants the rate to be lowered.
