There is going to be an upturn for the strategic Chabahar port. India and Iran have decided to give larger subsidies – forty percent at present by India, to merchant ships using the facility, and thus make it as attractive as Bandar Abbas or Karachi port in the region. Decks have also been cleared for bank finance to purchase badly needed port equipment worth $85 million.

The procurement has been held up because of US sanctions. Now Washington has given an assurance in writing to India of help in getting bank finance, reports say. In November 2018, US granted a waiver to the port from the sanctions it had imposed on Iran but mere announcement did not move bankers to stick their neck out. Washington has recognized that the strategic project was a lifeline for war-torn Afghanistan to get humanitarian supplies from India.

During the recent visit of External Affairs Minister S Jaishankar to Washington, “they (US) have given us something in writing, and we are trying to go ahead”, officials familiar with the development are quoted as saying in media dispatches.

The equipment to be procured include four rail-mounted quay cranes (RMQCs), mobile harbour cranes, and 14 rubber-tyred gantry cranes or RTGCs. India is said to have placed orders for the equipment quite a while ago from Chinese, Italian and Finish companies. Once this equipment is installed, India will hire an Indian manage, operate and maintain (MOM) contractor for the port. At present short term arrangements are in place.

India Ports Global (a 60:40 joint venture between Jawaharlal Port Trust and Deendayal Port Trust) and Aria Banader Iranian Port signed a deal in May 2016 to equip and operate the container and multi-purpose terminals at Shahid Beheshti – Chabahar Port Phase-I with capital investment of $85.21 million and annual revenue expenditure of $ 22.95 million on a 10-year lease. Cargo revenues collected are to be shared by both sides.

Under the Chabahar deal, India is to make an investment of $ 8 billion and develop the port as a gateway to Afghanistan and Central Asia by passing Pakistan. Iran has completed 70 percent of the first phase of the Chabahar project at a cost of $340 million.

India has built a 240-km road connecting Afghanistan with Iran. Also in the pipeline is a rail route connecting Chabahar with Hajigak iron and steel mining project in central Afghanistan. Seven Indian companies are engaged in the $11-billion Hajigak venture.

The tryst with Chabahar goes back to late 1990s when Iran, India and Russia, collaborated in backing the Northern Alliance in Afghanistan against the Pakistan-backed Taliban. At that time, Iran invited India to develop the Chabahar port to obtain ready access to Afghanistan. In 1997, a trilateral agreement was signed with Turkmenistan to expand trade into Central Asia and, in 2000, another agreement with Russia to provide seamless transport between India and Europe via an International North-South Transport Corridor.

As the Afghan Khaama Press agency reports, India, Iran and Afghanistan got together in January 2003, for development of transportation links to Afghanistan. India agreed to lay a railway track between Chabahar and Zaranj. India has spent $134 million during 2005–2009 to construct a road from Delaram in Afghanistan to Zaranj at the Iran-Afghanistan border. Iran has also built a roadway between Milak, close to Zaranj, and Chabahar passing through Zahedan and Iranshahr. India is committed to the speedy construction of a key railway line linking Chabahar port to Zahedan on the border with Afghanistan to facilitate Afghan exports.

Through Milak, Zaranj and Deleram, connectivity has been established to major Afghan cities like Herat, Kandahar, Kabul and Mazar-e-Sharif. In March 2012, ships from India docked at Chabahar carrying 100,000 tonnes of wheat under humanitarian aid to Afghanistan. The Afghan businesses have begun to shift from the Karachi port to Chabahar port for transit.

However, without further development of the Chabahar port, these road links would remain underutilized. Hence the new initiatives on the port. More over there is a view in New Delhi and Tehran that the two sides have achieved the political objectives behind developing Chabahar.

The decision to increase subsidies for merchant vessels using the facility is a sequel to this thinking. It was reached when External Affairs Minister S Jaishankar visited Tehran on December 22- 23 to co-chair the Joint Commission meeting with his Iranian counterpart Javad Zarif.

“Just concluded a very productive India-Iran Joint Commission Meeting with my co-chair FM Zarif,” Jaishankar tweeted after the meeting. “Reviewed the entire gamut of our cooperation. Agreed on accelerating our Chabahar project,” he said.

Jaishankar also met President Hassan Rouhani and roads and urban development minister Mohammad Eslami. Both sides discussed ways to strengthen banking ties to speed up implementation of joint projects.

“Completing the Chabahar-Zahedan railway and connecting it to Iran’s national railway can elevate the position of Chabahar port, revolutionise regional commerce and help transport goods on a cheaper and shorter route,” said President Hassan Rouhani.

Two days before Jaishankar’s visit to Tehran, officials of India, Afghanistan and Iran met in New Delhi on 20 Dec and agreed to finalise a protocol to streamline transit, roads, customs and consular matters at Chabahar port. The Federation of Freight Forwarders’ Associations in India will conduct a study to streamline cargo transit through Chabahar. The three nations agreed to include Mormugoa and New Mangalore ports also (in addition to Jawaharlal Nehru Port, Mundra, Kandla and Cochin), in the designated route under the Chabahar agreement.

Since December 2018 when India took over operations at Shahid Beheshti terminal, the port has handled more than 500,000 tonnes of cargo, including some 1,000 tonnes of exports from Afghanistan.

Chabahar is 700 kilometers closer compared to the Karachi port and it is 90 kilometers closer to the center of the country, Kabul. Therefore, distance has an impact,” said Kabul-based analyst Abdul Rasheed Janbaz.”

But there is no denying that despite exemptions, US sanctions have hindered Afghan trade through Chabahar Port. For example, business owners have not received payment for a talc shipment of 50 containers sent to India eight months ago, according to Sakhi Ahmad Paiman, deputy head of the Afghan Chamber of Industry and Mines. After that no more talc containers sent to Chabahar for onward dispatch to India.

“At least 1,000 tons of talc was exported through Chabahar Port to India but the exporters have not been able to receive their money over the past eight months,” Paiman said.

Afghan Ministry of Transportation has promised take up the difficulties faced by traders and exporters.

“The Chabahar Port is exempt from US sanctions but if there are any challenges, the Ministry of Transportation is committed to solving them,” said Ali Sina Saed, a ministry spokesman.

By Tushar Charan