The government plans to rope in some of the leading private sector players in the infrastructure field such as Jindal Infrastructures, Essar, SAIL and IRCON to develop the area around Iranian port Chabahar.
The plan is to build a free trade zone (FTZ) with the objective of attracting private investments in the first phase of the project. Additionally, India will also be setting up rail connectivity as the project takes off, a top official involved in the facilitation of the project told BusinessLine .
“It cannot just be a government-to-government project only. Private participation is required. And our companies know that market well, so it will be easier for them to enter there,” the official said.
The railway line will connect the port with the Afghanistan. It will also link India with the entire Central Asian region.
Meanwhile, the plan to operationalise the two berths is underway with the Ministry of Shipping negotiating commercial terms with the Iranian government. The $31 billion-project once complete will raise the operational capacity of the port to around 86 million tonnes.
With the lifting of sanctions, Iran will become a lucrative market for India. “We plan to commence talks for a trade pact with them at an early date,” said another official, who refused to be identified.
The Ministry of External Affairs (MEA) has also asked the Shipping Ministry to expedite the talks and start work on the project before Prime Minister Narendra Modi travels to Tehran in early 2016.
Iran has always been strategically important for India. Through the Chabahar Port, India will be gaining access to the south and south-western Iran with Afghanistan as the transit point.
It will also help India bypass Pakistan, which has long acted as an obstacle in India-Afghanistan trade.
Recently, India’s Ambassador to Iran Saurabh Kumar had stated that investments in the second phase of the development of the berths are being sought. The berths will help in importing crude oil and urea shipments faster saving millions of dollars in transactions costs.