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The Shipping Ministry has finally broken the stalemate over the Iranian Chabahar port project.
It has agreed for an Iranian company as the co-developer of the ₹1-lakh crore project, provided that the company is selected through a bidding process.
The Chabahar port is being developed as both a strategic and an economic asset by the Centre for which efforts were initiated in 2001, when former Prime Minister Atal Bihari Vajpayee visited Iran.
A senior Ministry official said that all these years the Iranians gave the impression that the port would be developed exclusively by the Indian government. But suddenly, in late July, a proposal came from the Iranian side that the project development would require a local company, which would be nominated by the government.
This demand led to the concession agreement being put on hold.
In the last two months, a compromise formula has been worked out under which open bids would be called for the Iranian partner company, which will have to come up with a certain amount of capital, the official said.
The official said that along with the port, the Centre also wants to develop a port-based urea fertiliser plant for which rock phosphate would be locally sourced.
The fertiliser plant requires natural gas as fuel, which the Iran government has offered to supply at $2.95 per mmBtu but the Centre finds it unviable in the current market scenario.
It has asked for gas at $1.5/mmBtu which could be increased marginally. Soon a decision will be taken in this regard and the final concession agreement could be signed by mid-December, the official said.
The port is located in Sistan-Baluchestan province of Iran and offers easier access to landlocked Afghanistan, where India is pumping in a lot of money for strategic reasons.
Today all the supplies from India to Afghanistan have to be sent via Karachi port.
The official also pointed that a urea-based fertiliser plant based on relatively cheap gas could significantly reduce the import bill.
Indian corporate houses such as Adani Grop and JM Baxi have also shown interest in participating in the port development projects.
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