India to begin interim operations at Chabahar Port within weeks

December 10, 2018

TEHRAN - The deadly terrorist attack at southeastern Chabahar Port last week gave rise to concerns regarding the sustainability of the project and whether any of the three parties — India, Iran and Afghanistan — would pull out of the project.

However, that doesn't seem happening as the three parties have reaffirmed their commitment to continue the project that has the potential to transform their economies.

Putting speculation and concern to rest, Indian government is making preparations to begin interim operations at the strategic port in Iran's Sistan-Baluchistan province.

According to a report in India's Business Standard newspaper, India plans to tweak the shareholding pattern of India Ports Global Limited and making it a government entity, which will fulfill the terms imposed by U.S. sanctions on Iran and allow India to operate the project. 

The report, quoting a government source, said the operations will kick off in a few weeks. The government is buying out the shares of India Ports Global, which are now held in a 60-40 ratio by the Jawaharlal Nehru Port.

The strategic Chabahar port is being considered a gateway to golden opportunities for trade by India, Iran and Afghanistan with central Asian countries. The port will overwhelmingly reduce the dependence of Kabul and New Delhi on Karachi port to do business with each other.

In May 2016, Indian Prime Minister Narendra Modi announced that India would invest $500m to develop and operate the strategically important port. In August 2017, India’s minister for transport and shipping Nitin Gadkari announced that Chabahar Port would be operational by 2018.

The port was recently exempted from U.S. sanctions on Iran after New Delhi, according to sources, made it emphatically clear to U.S. officials that they cannot walk out of the project because of "heavy stakes involved".

While the port has extraordinary strategic significance for India and Afghanistan, for Iran its development could bring economic dividends and cement the country's position as a regional bulwark.

Experts believe the port will also offer Iran an alternative coastal infrastructure and reduce its dependance on the shipping hubs in Persian Gulf, which carry heavy risks in the event of military incursions by adversaries.

Once it becomes operational, the port will also uplift the economic condition of people in Sistan-Baluchistan and revive province's flailing economy. The province has been hit hard by drought and insurgency by Baluch militant groups.

Just last week, there was a deadly attack near the port, which killed two people and injured 35 others. The attack was claimed by a Baluch militant group. Many suspects in the attack have been arrested, the Intelligence Ministry announced on Sunday.

India joined the world community to condemn the "despicable terrorist attack" and offered condolences to the government and people of Iran.

Meanwhile, a senior official from Iran’s Ports and Maritime Organization has downplayed the impact of terrorist attack on the development of Chabahar port and foreign investments.

“The terrorist blast was nothing more than playing with firecrackers outside the police headquarters in Chabahar, and had no direct link to Shahid Beheshti port,” Hadi Haqshenas said.

The province of Sistan-Baluchistan has been the scene of similar terrorist attacks in the past as well, he noted.

“This is not the first time that such an attack is carried out in the province. Over the past year, the province was targeted by armed groups but the Islamic Revolution Guards Corps (IRGC) foiled them," he said.

“Our main project was to inaugurate the first phase of Shahid Beheshti port in a ceremony attended by presidents of Iran and Afghanistan as well as Indian prime minister,” he said.

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