India to Start Full Operations at Chabahar Port by May End

India expects to start full-scale operations at Iran’s Chabahar Port by the end of May, the country’s shipping minister said in a boost for regional trade.
India has been developing a part of the port on Iran’s southeastern coast along the Sea of Oman as a way to transport goods to Iran, but also Afghanistan and Central Asian countries, and avoiding rival Pakistan, Reuters reported.
But US sanctions on Iran slowed down the port’s development and Indian officials are now counting on a thaw in relations between Washington and Tehran under US President Joe Biden to move forward with nearly $500 million of investments.
“I am expecting to visit Iran in April or May for the inauguration of full operations,” Mansukh Mandaviya, India’s ports and shipping minister, said.
India is developing two terminals at the port, including the Shahid Beheshti complex, and under an agreement signed with the Iran, it would run the terminal for 10 years.
Mandaviya said the port had already commenced operations in a limited way and the growth potential was evident.
Chabahar Port had handled 123 vessels and 1.8 million tons of bulk and general cargoes from February 2019 to January 2021, he said.
“This is much higher than our expectations. Imagine the scale of operations and freight saving once it is fully operational,” he said.
Last year amid the pandemic, India used Chabahar Port to send 75,000 tons of wheat as humanitarian assistance to Afghanistan and 25 tons of the pesticide malathion to Iran to deal with a locust invasion.
The second batch of 25 tons has recently reached Chabahar.
As part of the agreement with Iran, India would provide six cranes and other equipment worth $85 million to equip and operationalize the Shahid Beheshti terminal.
So far, India has supplied two of these mobile harbor cranes and four others will be delivered over the next few weeks.
“Chabahar Port has emerged as the connecting point for the region to deliver humanitarian assistance during the Covid pandemic,” Mandaviya said.
India also plans to set up an around 600-km railroad from Chabahar Port to Zahedan, the provincial capital of Sistan-Baluchestan in Iran close to the Afghan border, at a cost of $1.6 billion to facilitate the movement of goods to Afghanistan.
New Delhi has also proposed inclusion of Chabahar port in the International North-South Transport Corridor (INSTC), connecting Mumbai with Moscow, the minister said, referring to discussions at a virtual summit on Chabahar Port on Thursday.
The INSTC project, proposed by India, Russia and Iran in 2000, and later supported by 10 other Central Asian countries, envisions a 7,200 km-long multimodal network of ship, rail and road for freight transport, aiming to cut carriage costs by about 30% and transit time from 40 days to about 20 days.

India's 2nd Batch of Chabahar Port Equipment to Arrive on March 16

The second batch of India’s port equipment for Chabahar, including two 100-ton mobile coastal cranes worth $7.5 million, will arrive at the port on March 16, Behrouz Aqaei, the head of Sistan-Baluchestan’s Ports and Maritime Organization, said on Thursday. 
Noting that the import of the equipment is part of the $85-million build, operate, transfer contract between Ports and Maritime Organization of Iran and India Ports Global Limited, an Indian investor company, the official said the South Asian country delivered the first consignment of port equipment, including two 140-ton coastal cranes worth $8.5 million on Jan. 17. 
“With the arrival of the first batch of the strategic equipment, Chabahar’s loading and unloading capacity increased to 20 million tons and India delivered on 10% of its financial commitments to Iran. Two more coastal cranes are scheduled to arrive at Chabahar by Sept. 22, 2021, i.e. 30% of India’s $85 million commitments,” Aqaei was quoted as saying by the news portal of the Ministry of Roads and Urban Development.
“India’s investment in Chabahar’s Shahid Beheshti Port is part of the trilateral agreement among Iran, India and Afghanistan, which has so far resulted in the transportation of more than 300,000 tons of cargo between the ports of India and Chabahar.” 
During a briefing on Maritime India Summit 2021 to be held from March 2-4, Ministry of Ports, Waterways and Shipping (MoPWS) Additional Secretary Sanjay Bandopadhyaya said, "For Chabahar, presently, cranes, which are available, are sufficient for port operations. Two more cranes are standing for loading near the port near Venice, which will reach by March end to this port. Two more will reach by June end." 

80% Discount on Duties, Charges

The head of Sistan-Baluchestan’s Ports and Maritime Organization has unveiled incentives that will be offered in the next Iranian year (March 2021-22) for liners arriving at Chabahar’s Shahid Beheshti Port. 
Aqaei said an 80% discount in all port duties and 90% discount on terminal handling charges (THC) compared with other Iranian southern ports are the main incentives envisioned for the next fiscal year (starting March 21). 
“An 80% discount on charges of waiting time at the wharf, 60% discount on guidance, towing and dredging of channels, 75% discount on warehousing of empty containers and an 85% discount on warehousing of exporting containers and foreign transit have been set,” he said. 
Noting that a stepwise discount rate will be offered on THC charges for arriving containers next year, the official said, “Lands will be handed over as part of financing contracts, including build-operate-transfer; build, own, operate and transfer; and build, lease, transfer; and build, own, operate. 
“A three-month exemption from warehousing of empty containers for exports and transit as well as exemption of THC charges for unloading empty containers for exports and transit have been approved for the next year as well,” he said. 
“Loans will be granted for the purchase of passenger and car carrier ships, construction of petroleum reservoirs, storage facility, silos and other warehousing hubs. Rent hikes won’t be imposed on land leaseholds for five years. A 30% internal rate of return for investment contracts in Chabahar has been set.”