Iran, India trade charges on delay of Chabahar port developement
The Budget may have allotted Rs 150 crore for the development of Chabahar port in Iran, but it may not be enough to bring the long delayed project back to life as Tehran has not yet submitted a proposal for release of the fund despite several reminders, some officials say.
Indian government had set aside $235 million, or about Rs 150 crore, line of credit for the project since 2015 but is unable to release the first tranche of $150 million, they said.
"The funds cannot be released without paperwork and this has not yet reached the Indian government. Even reminders from EXIM Bank to Iran have not helped," a person familiar with the matter told ET.
"There are apparently no reasons behind Iran's delay in submitting the proposal for the release of loan," the person alleged.
As per the memorandum of understanding (MoU) signed during shipping minister Nitin Gadkari's visit to Tehran in May 2015, EXIM Bank is to extend $150 million line of credit for development of port complex. Another $85 million was allotted later following contract between the two sides for supply of equipment to develop two berths in the port complex, persons familiar with the development told ET.
They said India had offered to release first portion of the line of credit within four months of the Iranian proposal on the port expansion and development plan, but the proposal has yet to come.
Iranian government sources, however, told ET that the Indian side is delaying work on the project, but did not explain reasons for delay. The project was earlier delayed when the Iranian side unilaterally changed terms and conditions on the eve of the signing of MoU in 2015 by introducing a local stakeholder without consulting India, Indian sources said.
China had expressed interest to join the project prior to the nuclear deal in mid-2015.
Indian shipping ministry has created a special purpose vehicle (SPV) for Chabahar port development, which is currently shortlisting Indian firms to determine equipment suppliers for port construction.
Ports and Management Organisation (PMO) is Iran's nodal authority to implement the project. Officials said India is not unduly perturbed over impact of US sanctions on Iran's missile programme.
"The sanctions are not targeting Iran's PMO that is in charge of Chabahar Port. However, the government here is keeping a close watch if other sectors are being targeted, which might impact Indo-Iranian economic partnership," said a person who requested not to be identified.