Victory For Iran: India Nears Completion Of Chabahar: Iranian Media
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Victory For Iran: India Nears Completion Of Chabahar: Iranian Media

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Two Mobile Harbor Cranes (MHC), each weighing 100 tons, arrived at
Chabahar from India

The second batch of equipment supplied by India has reached Chabahar, Iranian
and Indian officials say, bringing New Delhi closer to full operation of the
two terminals which it is developing in the port.

India has been developing a part of Chabahar on Iran’s south-eastern coast
along the Gulf of Oman in order to expand trade with Iran, Afghanistan and
Central Asian nations.

Two Mobile Harbor Cranes (MHC), each weighing 100 tons, arrived in the port
Sunday, more than a month after the first consignment of two 140-ton MHCs
was supplied.

“Continuing with our commitment to develop Chabahar Port, second shipment of
equipment reaches Shahid Behesti Terminal,” India’s Ports Shipping and
Waterways Minister Mansukh Mandaviya tweeted Monday.

Two more rail-mounted cranes will be delivered in the next few weeks. The six
cranes have been built by Italian firm Italgru under a $25 million contract
signed last year.

India had initially awarded the contract to Shanghai Zhenhua Heavy Industries,
but the country cancelled it last year because of delays by the Chinese
company in supplying the equipment ordered in 2017.

Under a trilateral contract signed with Iran and Afghanistan in May 2016,
India is developing two berths at the Shahid Beheshti port of Chabahar with a
total capital investment of $85 million and will operate them on a 10-year
lease.

Indian officials expect to start full-scale operations at the terminals by the
end of May. Earlier this month, Mandaviya said he expected to visit Iran in
April or May for the inauguration of full operations.

The port commenced operations on a limited scale in December 2017. Last year,
India used Chabahar to send 75,000 tons of wheat to Afghanistan and 25 tons
of malathion pesticide to Iran to deal with a locust invasion. According to the Indian minister, the port had handled 123 vessels and 1.8
million tons of bulk and general cargoes since February 2019.

“This is much higher than our expectations. Imagine the scale of operations
and freight saving once it is fully operational,” he was quoted as saying this
month.

Why Is It So Important To India?

India sees Chabahar as a stepping stone in its bid to become a regional
infrastructure developer and expand trade with Afghanistan and other Central
Asian states as well as the region beyond.

It has pledged to invest another $500 million in developing a free trade zone
(FTZ) around Chabahar and build a $1.6 billion railway line some 600 km away
to Zahedan, an Iranian city near the border of southwest Afghanistan.

Recently, New Delhi has proposed that Chabahar be included in the
International North South Transport Corridor (INSTC), connecting Mumbai to
Moscow through Iran.

The 7,200-km multimode route was proposed by Russia, Iran and India in 2000,
before being joined by 10 Central Asian countries. It envisages a network of
ship, rail and road for freight transport that will cut carriage costs by
about 30-60% and transit time from 40 days to about 20 days.

Hence, Chabahar is thought to play a crucial role in reducing dependency on
the Suez Canal for transporting cargo to Europe.

Under the 2017 tripartite agreement, India has committed at least $21 billion
to the corridor linking Chabahar to Hajigak in central Afghanistan where the
rising economic power plans to plough $11 billion into an iron and steel
mining project.

Development Plans

Dating back to 2500 BC and first mentioned as the port of Tis during the
invasion of Persia by Alexander of Macedon, Chabahar currently consists of two
ports of Shahid Kalantari and Shahid Beheshti, each having five berths.

With the former being a traffic port, the Shahid Beheshti is being developed
as a regional hub port. Since 2017, its capacity has expanded from 2 million
tons per year to 8 million tons and is expected to hit 20 million tons
once all development work is complete.

Under the May 2016 deal, India is refurbishing one of the berths at the Shahid
Beheshti, and building a container handling facility at the port.

Iran currently relies on its port of Bandar Abbas on the Persian Gulf for 85%
of its seaborne trade. Bandar Abbas is not a deep water port and cannot handle
250,000-ton oceangoing cargo ships, making Iran dependent on UAE ports where
such vessels dock for transfer of cargoes to smaller ships for onward shipment
to Iran. This means a loss of revenue and provides a chokehold during the
times of sanctions and political standoffs.

Chabahar will serve as Iran’s first oceanic port, providing the gateway to
Central Asia.

Challenges And Iran’s Trump Card

The desire to develop Chabahar in spite of enormous challenges indicates the
recognition in both Iran and India of the crucial role which the project plays
in their strategic priorities.

India views China’s attempt to redraw regional boundaries through its
trillion-dollar Belt and Road Initiative with suspicion and tries to enhance
its own regional connectivity profiles. Iran, in contrast, has signalled its full dedication to the initiative which
it sees as central to its bid to become a transport hub in the heart of
Eurasia.

China is the largest foreign investor in Iran, having successfully completed a
number of infrastructure projects in Iran including the Tehran metro. It is
further providing $1.5 billion for the electrification of the Tehran-Mashhad
railway line.

In 2016, the two countries announced their willingness to expand bilateral
trade to $600 billion. Such an evolving closeness does not sit well with India
which sees China as a rival. Iran’s openness to Pakistani and Chinese
participation in the development of Chabahar has also vexed India.

Moreover, India’s efforts to get a special concession for development of
Farzad-B gas field in the Persian Gulf have hit a brick wall, which has
bedevilled investment plans. Another detractor is the challenge which India has been facing in acquiring
heavy equipment from foreign countries, mainly because of the reluctance of
foreign banks to open letters of credit for a project in Iran, despite
Chabahar port being granted a waiver from US sanctions on the Islamic
Republic.

Against so many odds, India’s completion of the project represents a key
geo-economic victory for Iran, which is likely to encourage other investors to
abandon their qualms and engage the Islamic Republic in trade.

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