India has delivered a consignment of heavy equipment, including cranes, for further development of Iran’s Chabahar port, signalling New Delhi’s commitment to the strategic connectivity project that can provide access to markets in Central Asia.
The consignment included two mobile harbour cranes of 140 tonnes, which were acquired from the Italian firm Italgru S.r.l. under a deal for a total of six cranes, people familiar with developments said on condition of anonymity.
“The first shipment of strategic loading and unloading equipment worth $8.5 million has arrived in Chabahar port to mark the activation of the contract between the Ports and Maritime Organization (PMO) and the Indian side,” said Behrouz Aghaei, director-general of the ports and maritime department of Iran’s Sistan-Baluchestan province.
Aghaei told Tehran Times that the heavy equipment will be installed at Shahid Beheshti terminal at Chabahar port, which is operated by India.
Reported last month that the cranes were set to be delivered in January, months after India cancelled a $30-million contract with Shanghai Zhenhua Heavy Industries for heavy cranes because of delays by the Chinese company in supplying the equipment ordered in 2017.
In May 2016, India Ports Global and Iran’s Aria Banader Iranian Port and Marine Services Company signed a deal to equip and operate the Shahid Behesti terminal, with a capital investment of $85.21 million and annual revenue expenditure of $22.95 million, on a 10-year lease.
Despite the Chabahar port being granted a waiver from US sanctions on Iran, India has faced problems in acquiring heavy equipment from foreign countries, mainly because of the reluctance of foreign banks to open letters of credit (LoCs) for a project within Iran.
A special process was adopted to acquire the cranes from Italy that sidestepped the sanctions issue, the people cited above said. The cranes were shipped to India before being transported to Chabahar, they added.
Aghaei said the Indian side will operate Shahid Beheshti terminal under a build-operate-transfer (BOT) contract and this was the first time such a deal is being implemented in an Iranian port with 100 per cent foreign investment.
Grain suckers, gate cranes and gantry cranes were installed at Shahid Beheshti terminal last year, but the lack of heavy cranes has hampered the loading and unloading of cargo from ships.
“India is the only foreign country that is currently participating in a major development project in Iran despite the US sanctions,” Tehran Times noted. The project is the “anchor for the expansion of economic relations” between the two sides, it added.
The Iranian side has requested the Indian government for railway equipment, including locomotives, signalling gear and equipment for railway stations, to bolster operations on the Chabahar-Zahedan and Khaf-Herat railway lines to give a further boost to Chabahar port. Iran has suggested this equipment can be provided by India under a $150 line of credit proposed some years ago.
India, Iran and Uzbekistan held their first trilateral meeting focused on Chabahar port in December 14 and this body is expected to meet every three months to push the joint use of the trade and transit facility on the Gulf of Oman. Afghanistan will be invited to the next meeting of this body.