TEHRAN (SW): India and Iran signed a Memorandum of Understanding on Wednesday May 6, for the development of the strategically important Chabahar port which will give India sea-land access route to Afghanistan bypassing Pakistan.
Last week, Prime Minister Narendra Modi had assured Afghan President Ashraf Ghani of India's commitment to building the port.
The pact was signed after comprehensive talks between Nitin Gadkari, visiting Indian Minister for Shipping and Road Transport and Highways and Abbas Ahmad Akhoundi, Iranian Minister for Transport and Urban Development.
This MoU will allow Indian and Iranian commercial entities to commence negotiations towards the finalization of a commercial contract under which Indian firms will lease two existing berths at the Chabahar Port and make them operational as container and multi-purpose cargo terminals.
PTI, the Indian state news agency reported that the Chabahar Port will provide Afghanistan`s garland road network system an alternate access to a sea port, which will significantly enhancing that nation`s overall connectivity to regional and global markets as well as boosting the reconstruction and humanitarian efforts in the country
India and Iran agreed in 2003 to develop a port at Chabahar on the Gulf of Oman, near Iran’s border with Pakistan, but the venture has made little progress because of Western sanctions on Iran. The port will be in India’s national interest as it would cut transport costs and freight time to Central Asia and the Gulf by about a third.
The port is also central to India’s efforts to circumvent Pakistan and open up a route to landlocked Afghanistan where it has developed close security ties and economic interests, Indian Express said in its report. India has already spent about $100 million to construct a 10-mile road in western Afghanistan to link up with Chabahar port, it added.
"Resumption of Iran-India cooperation in the southeastern Iranian port city of Chabahar would lead to a new chapter in relations of two countries”, Iranian President Hassan Rouhani, in his meeting with Gadkari, said.
India intends to lease two berths at Chabahar for 10 years. The port will be developed through a special purpose vehicle (SPV) which will invest USD 85.21 million to convert the berths into a container terminal and a multi-purpose cargo terminal.
As per the framework, approved in the Cabinet last year, an Indian joint venture company would lease two fully constructed berths in Chahbahar port's Phase-I project for a period of ten years, which could be renewed by "mutual agreement".
The Indian side will transfer ownership of the equipment to be provided through the investment to Iran's port and Maritime Organisation (P&MO) without any payment at the end of the tenth year.
From Chahbahar port using the existing Iranian road network, a link up to Zaranj in Afghanistan and then using the Zaranj-Delaram road constructed by India in 2009, access to Afghanistan's Garland Highway can be made.
This would establish road access to four of the major cities of Afghanistan — Herat, Kandahar, Kabul and Mazar-e-Sharif.
