Months after cancelling deal with China, India acquires heavy cranes for Chabahar port

India’s operations at Iran’s strategic Chabahar port are set to get a boost with the delivery in January of four heavy cranes, months after a deal with a Chinese state-run firm for the equipment was cancelled amid the border standoff.

In September, India had cancelled a contract with Shanghai Zhenhua Heavy Industries worth almost $30 million for four rail-mounted quay cranes, required for moving heavy cargo, citing delays by the Chinese company in supplying the equipment ordered in 2017.

Following a fresh tender for cranes with 65-tonne capacity, the equipment was procured from a Western company and is now expected to reach Chabahar by next month, people familiar with developments said on condition of anonymity. They declined to give further details in view of sensitivities linked to US sanctions on Iran, though Chabahar port has been granted a waiver.

The people further said the Iranian side had made a request to the Indian government for railway equipment, including locomotives, signalling gear and equipment for railway stations, to bolster operations on both Chabahar-Zahedan and Khaf-Herat railway lines.

The Iranian side has suggested this equipment can be provided by India under a $150 line of credit that was proposed some years ago, the people said.

These developments come in the wake of the opening on December 10 of a major section of the 220-km Khaf-Herat railway link, which will ultimately connect Khaf in Iran and Roznak in Afghanistan’s Herat province, and a decision by Tehran in November to complete the 628-km Chabahar-Zahedan rail line, which runs from the port to near the Afghan border, with its own funds instead of waiting for the participation of the Indian Railway Construction Limited (IRCON).

“Iran has decided to complete all the infrastructure on its side and India is welcome to join in all the projects. For example, they can supply the railway equipment and develop other facilities such as refineries and petro-chemical industries in the Chabahar free trade zone,” one of the people cited above said, adding the Chabahar-Zahedan rail link is expected to be completed by July 2021.

The external affairs ministry said recently that IRCON had completed a feasibility study and was awaiting a decision from the Iranian side to name a nodal authority. However, it is believed that there was hesitation on the part of private firms to deal with a company linked to the Iranian Revolutionary Guards Committee (IRGC), which has been sanctioned by the US.

Amid reports that some quarters are calling for the Khaf-Herat rail link to be extended south towards the Pakistan border, the people noted that there is interest in taking the line northwards to Uzbekistan and suggested India could play a key role in such a venture.

India, Iran and Uzbekistan held their first trilateral meeting focused on Chabahar port on December 14 and the people said this body is now expected to meet every three months to push forward the joint use of the strategic trade and transit facility on the Gulf of Oman to enhance regional connectivity.

“Given its extensive presence in Afghanistan, India can play a role in helping to develop the Khaf-Herat rail route and extend it to Uzbekistan. Despite the sanctions and the Covid-19 pandemic, the Khaf-Herat line was opened and it will help boost landlocked Afghanistan,” the person cited above said.

In May 2016, India Ports Global and Iran’s Aria Banader Iranian Port and Marine Services Company signed a deal to equip and operate the Shahid Beheshti terminal at Chabahar port, with a capital investment of $85.21 million and annual revenue expenditure of $22.95 million, on a 10-year lease.