India, Iran Agree New US$80 Million Funding To Develop Chabahar Port
Ali Akbar Safaei, the Head of the Iranian Ports and Maritime Organization, has stated that disagreements with the Indian operator at Iran’s Chabahar Port, a key part of the INSTC and a direct link to Mumbai, have been cleared up, and a contract will be signed between Iran and India regarding India’s investment.
Safaei said that in this regard, discussions were conducted with the Indian side for four days last week (June 12-16). During the discussions, an agreement was reached on a number of disagreements that had threatened to delay the Ports development and interfere with the Persian Gulf operations of the INSTC network.
“As part of the memorandum of understanding among Iran, India, and Afghanistan, so far, an initial investment worth US$25 million has been committed to Iran and will be used to develop the port,” he said. The route is of use to Afghanistan, which has a border with Iran and can use that to access markets in India – and vice-versa.
Safaei noted that the total Chabahar investment will reach US$80 million and is part of a long-term agreement between Iran and India.
A memorandum of understanding was signed between Iran, India, and Afghanistan in 2016. According to the memorandum, Iran’s Chabahar port is used for the trade of goods between India and Afghanistan. Under the memorandum, India’s IPGL were appointed as the Chabahar port operator with an investment of US$85 million. There have been delays in freeing that capital.
Within the framework of the memorandum, two 140-ton cranes worth a total of US$7.5 million were brought from India and installed in Chabahar port, which increased the annual loading and unloading capacity of the port reached 20 million tons. Yet other funding failed to materialise on time, partially due to US sanctions on Iran and difficulties getting finance into the country.
The agreement deals with a significant INSTC bottleneck and clears the way for smooth operations. The other major INSTC issue was the Northern Iran Rasht-Astara railway link however it has been agreed that Russia will finance this.