Regime Change in US a Shot in the Arm for Chabahar Port Project

Joe Biden’s triumph in the US Presidential polls and the likely easing of sanctions on Iran by the new regime, will give a big impetus to the development of India-funded Chabahar port and help resume oil supplies from the Persian Gulf nation.

“Overall, the imminent regime change is a very positive development for India and Iran, and we look forward to this change to translate into action and further softening towards Iran,” said a government official overseeing the Chabahar port project.

Chabahar port project was the “only bright spot” in India-Iran relations over the past few years, and the “momentum it got should continue”, he said.

Oil supplies

The resumption of oil supplies will be the biggest gain for India post lifting of sanctions.

“Iranian crude is the cheapest for India. Our refineries are tailor-made to process Iranian crude,” the official said.

Located in the Sistan-Baluchistan Province on Iran’s south-eastern coast (outside Persian Gulf), Chabahar port gives India a sea-land access route to Afghanistan and Central Asia through Iran’s eastern borders. The project is considered a strategic venture for the development of regional maritime transit traffic to Afghanistan and Central Asia.

The project has been bogged down by delays due to the US sanctions.

“For Chabahar to develop further, we need certain equipment, which neither Iran nor India makes. These are basically from western countries or from South Korea and China and they are reluctant to supply,” the official said.

“How comfortable the equipment suppliers are to supply to Iran and how banks view transactions where Iran is involved are the key issues. Banks and suppliers must get comfort that the new regime will not penalise them. Chabahar port project doesn’t depend on India. India has always been keen and we have been trying,” he stated.

“The regime change is going to be good, and we were waiting for it. I would say our prayers have been answered as far as our relations with Iran are concerned,” he added.

India Ports Global Ltd (IPGL) and Iran’s Aria Banader Iranian Port & Marine Services Company (ABI) signed a deal in May 2016 to equip and operate the container and multi-purpose terminals at Shahid Beheshti – Chabahar Port Phase-I – with a capital investment of $85.21 million and annual revenue expenditure of $ 22.95 million on a 10-year lease.

First phase of project

The first phase of Shahid Behesthi Terminal of Chabahar has been taken over by India Ports Global from December 2018 and is operational. The civil work of entire terminal (70 ha) is over. IPGL is in possession of about 1,400 metres of berth length with 14-16 metres draft.

Since starting operations, Chabahar has handled over 15 lakh tonnes of cargo, which includes bulk, container, livestock and general cargo, using the ship’s crane. The full-fledged operation is waiting for erection of quay cranes for loading and unloading cargo.