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Rules tweaked even as India set to get strategic Chabahar port in Iran
The looming US sanctions on Iran have put the deal for Chabahar port between India and Iran on the fast track. The two countries are working on amending the clause that mandates activation of the deal after receiving funding from India.
The looming US sanctions on Iran have put the deal for Chabahar port between India and Iran on the fast track. The two countries are working on amending the clause that mandates activation of the deal after receiving funding from India. Under a May 2016 pact, India was to pay $150 million to Iran after receiving an application seeking payment from the latter. Following this, the project was to be handed over to India for 10-year operations.
However, Iran alleged that India was delaying the development process and Indian authorities responded that Iran never submitted the application seeking payment on time and kept changing its decisions. The payment was to be made within three months of receiving the application. Now, an application for payment of euro 13 million ($18 million) made by Iran is under consideration.
Iran’s insistence on payment being made in euros have made things more difficult for India, sources said.
According to the sources, a high-level Iranian delegation visited India last Wednesday to discuss issues related to Chabahar port.
“A few amendments are likely to be made soon before things can move to signing of the main contract,” a senior government official aware of the development said.
An agreement for the start of interim operations was signed on May 6, 2018. However, two days later, the US announced its decision to re-sanction Iran, which slowed the whole process as India is not able to provide a bank guarantee for the project.
“So even the interim operation is in a slight problem. We should have started the operations by June. Everything is ready, but not being able to provide bank guarantee is a problem. So certain amendments are being made even is this regard, following which we can hope to start interim operations by November” a senior official said.
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When contacted, A K Gupta, managing director, India Port Global Ltd (IPGL), confirmed the development of de-linking the payment and project activation, though refusing to comment further. IPGL, a 60:40 joint venture between Jawaharlal Nehru Port Trust and Deendayal Port Trust (previously Kandla Port Trust), was set up by the government to make strategic investments in ports overseas.
Source: DNA Money
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