India’s minister for transport, highways and shipping was in Tehran on Saturday in connection with the inauguration of President Hassan Rouhani’s second term in office.
Prime Minister Narendra Modi had earlier congratulated Rouhani on his re-election as the president of Iran and affirmed India’s commitment to strengthen the “special relations” between the two countries.
“India and Iran have been historically sharing special ties… We are keen on developing Chabahar port and are hopeful of starting operations in 12 to 18 months,” Gadkari said.
Chabahar port, located in the Sistan-Baluchestan province on the energy-rich Persian Gulf nation’s southern coast, can be easily accessed from India’s west coast, bypassing Pakistan.
Gadkari’s visit has assumed significance as India has accelerated work at the Chabahar port and finalised some tenders for installation of key equipment there.
“Civil construction work has started there. We have finalised tenders worth Rs3.8 billion for equipment out of Rs6bn and once the port becomes operational it will become a growth engine,” the minister said.
Gadkari said he was also hopeful of certain approvals from the Iranian government for expediting work and added that once Chabahar became operational trade and business between the two countries would see a boost.
For greater trade and investment flow with Iran and neighbouring countries, the Indian cabinet last year approved proposals for development of Chabahar port, including a $150 million credit from Exim Bank.
According to the MoU signed by the two countries in May last year, India is to equip and operate two berths in Chabahar Port Phase-I with capital investment of $85.21m and annual revenue expenditure of $22.95m on a 10-year lease.
Ownership of equipment would be transferred to Iranian side on completion of 10 years or for an extended period, based on mutual agreement.
As per the accord, operations of two berths are to commence within a period of 18 months after the signing of the contract.
Besides the pact to develop the port, for which India will invest $500m, a trilateral Agreement on Transport and Transit Corridor has also been signed by India, Afghanistan and Iran.