On July 14th, various news outlets reported that Iran has dropped India from the Chabahar project, which was aimed at building a railway line linking Chabahar port to Zahedan which was to be further extended to Zaranj across the border in Afghanistan.
The agreement to build the Chabahar-Zahedan rail line was signed four years ago between India and Iran. But now, the Iranian government has decided to proceed with the construction and the track laying process of the 628 Km long railway line on its own saying that there have been delays in funds from the Indian side to start the project.
Officials told The Hindu that “the entire project would be completed by March 2022, and that Iranian Railways will proceed without India’s assistance, using approximately $400 million from the Iranian National Development Fund.”
This project was meant to be part of a Trilateral Agreement between India, Iran, and Afghanistan, to construct another trade route to Afghanistan and Central Asia.
The Indian government, however, denied this report and called it “speculative”. The Times of India reported that “New Delhi remained committed to financing and building the railway and was continuously engaged with Iranian authorities concerned to take this important project forward.”
On 16th July, Iran clarified that it made no deal with India on the Chabahar Railway project.
Farhad Montaser, a deputy to Iran’s Ports and Maritime Organisation, claimed that the report was “totally false because Iran has not inked any deal with India regarding the Chabahar-Zahedan railway.”
“We had a list of Indian investments in Chabahar port, which also included the issue of Chabahar railway infrastructure and the railway but during the negotiations, it was not agreed,” he told official news agency IRNA.
He further clarified that “Iran has only signed two agreements with Indians for investment in Chabahar: one is related to the port’s machinery and equipment, and the second is related to India’s investment to the tune of $150 million.”
Mr. Montaser concluded that the US sanctions have nothing to do to Iran-India’s cooperation in Chabahar”.
In 2018, the United States had agreed to a waiver on Chabahar port projects under IFCA (Iran Freedom and Counter-Proliferation Act).
The Indian government on 16th July said the project was waiting for the appointment of authority by Iran to resolve outstanding financial and technical issues.
“The MEA (Ministry of External Affairs) said India’s main investment in the Chabahar Port where it has taken over operations of one terminal, had progressed well in the last few years, handling 82 ships with 12 lakh tonnes of bulk cargo in 8200 containers since December 2018”, reported The Hindu.
MEA spokesperson, Anurag Srivastava, said that since 2016, there has been progress on the Chabahar port project, despite the difficulties posed by the sanctions situation.
Srivastava stated, “ IRCON (Indian Railway Construction Company Limited) was appointed by India to assess the feasibility of the project. It was working with CDTIC, an Iranian company under the ministry of railways in that regard. IRCON has completed the site inspection and review of the feasibility report.”
“Detailed discussions were thereafter held on other relevant aspects of the project, which had to take into account various challenges that Iran was facing. In December 2019, these issues were reviewed in detail at the 19th Iran-India Joint commission meeting in Tehran,” said Anurag Srivastava.
He further said, “In December 2019, issues [on the railway line] were reviewed in detail at the 19th India-Iran Joint Commission Meeting in Tehran. The Iranian side was to nominate an authorized entity to finalize outstanding technical and financial issues.”
Mr. Srivastava, however, declined to comment specifically on Iran’s decision to begin the project without India.
The MEA confirmed that due to policy changes on the Iranian side, India is no longer involved in the Farzad-B gas field project. The ONGC (Oil and Natural Gas Corporation Limited) had not only signed an agreement for exploration in 2002 but also invested around $100 million so far. The MEA didn’t give further details on this subject.
Mr. Srivastava said that “In January 2020, we were informed that in the immediate future, Iran would develop the field on its own and would like to involve India appropriately at a later stage. This matter remains under discussion.”
India had offered to invest approximately $6 billion in the Farzad-B gas field project, and $1.6 billion in the Chabahar Zahedan railway line.
– Aanandita Singh