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Home / India News / Pending issues holding up participation in Chabahar-Zahedan rail project: India

Pending issues holding up participation in Chabahar-Zahedan rail project: India

India sees the Chabahar port in the Gulf of Oman as key to its strategic plans to access both Afghanistan and Central Asian states

india Updated: Jul 17, 2020 00:07 IST
Rezaul H Laskar
Rezaul H Laskar
Hindustan Times, New Delhi
Chabahar port and the railway link to Zahedan are part of the International North-South Transit Corrido
Chabahar port and the railway link to Zahedan are part of the International North-South Transit Corrido(Reuters)

New Delhi India on Thursday said technical and financial issues yet to be finalised by Iran were holding up New Delhi’s participation in the Chabahar-Zahedan railway project, a key component of the trade and transit hub centred round the Iranian port.

Reacting to media reports suggesting that Iran had dropped India from the railway project that will link Chabahar port to Zahedan, along the border with Afghanistan, external affairs ministry spokesperson Anurag Srivastava said New Delhi was waiting for Tehran to “nominate an authorised entity to finalise outstanding technical and financial issues”. He didn’t give any more details.

India sees the port in the Gulf of Oman as key to its strategic plans to access both Afghanistan and Central Asian states. Though the US issued a waiver in 2018 sparing Chabahar from sanctions imposed on Iran, Indian entities and foreign financial institutions have been reluctant to back either the port or the railway project.

The leadership of India, Afghanistan and Iran signed a tripartite agreement on the development of the port during Prime Minister Narendra Modi’s visit to Tehran in May 2016. At the same time, India’s Ircon and Iran’s Construction and Development of Transportation Infrastructure Company (CDTIC) signed a MoU for building and financing the Chabahar-Zahedan railway link at an estimated cost of $1.6 billion.

Srivastava said Ircon was tasked by the Indian government to assess the feasibility of the project, and had completed site inspection and review of a feasibility report. “Detailed discussions were thereafter held on other relevant aspects of the project, which had to take into account the financial challenges that Iran was facing.”

These issues were also reviewed at the India-Iran Joint Commission meeting in Tehran last December.

An Iranian official, who declined to be named, said Tehran had decided to construct the railway project with Iranian funding and engineering capacities “in the absence of an active Indian engagement and partnership”.

Chabahar port and the railway link to Zahedan are part of the International North-South Transit Corridor and it was expected India could play a “more crucial role in funding and constructing this strategic transit route from Chabahar to Zahedan and from Zahedan to Sarakhs at the border with Turkmenistan”, the Iranian official said.

Srivastava said Chabahar port has made significant progress “despite the difficulties posed by the sanctions situation”. An Indian company, which has operated the port since 2018, has scaled up traffic. “Since December 2018, 82 vessels have been handled there, including 52 in the last 12 months alone. The port handled 1.2 million tonnes of bulk cargo and 8,200 containers,” he said.

“Proactive measures are currently underway to increase the usage of Chabahar port, both for Afghanistan and Central Asia,” he added.

Srivastava also clarified that Iran informed India in January that Tehran would develop the Farzad-B gas field on its own and would involve New Delhi “appropriately at a later stage”. He added, “This matter remains under discussion.”

India’s ONGC has been involved in negotiations in the discovery stage of Farzad-B gas field. “Follow-up bilateral cooperation was, however, impacted by policy changes on the Iranian side,” Srivastava said.

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