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Choppy Waters For Chabahar Port: India Slashes Grant To One-Third

In a clear indication that things don’t seem to be going too well for India as it works to develop the Chabahar port in Iran’s Sistan Baluchistan province, the government has reduced its grant allocation to one-third in the 2019-20 budget.
While India had set aside Rs 150 crore for the development of this strategically located port in the 2018-19 budget, the amount has been reduced to a mere Rs 50 crore for the current financial year. This detail is buried in the fine print of the budget’s Expenditure Document tabled in parliament by Finance Minister Nirmala Sitharaman on Friday.

Officials in the ministry of external affairs, however, sought to play down the grants cut in the budget, saying that at times this has to be done as money unspent meant audit objections. Therefore, the grant is in accordance with the financial requirements of the project.

While India was quite gung-ho about developing the Shaheed Beheshti terminal of Chabahar port as part of Phase-I of the project till not so long ago despite the U.S. sanctions on Iran, the picture doesn’t seem to be so rosy at present. Though the port has a U.S. waiver for now for the shipment of humanitarian assistance to Afghanistan, Indian sources do concede that “sanctions have played spoilsport.”

Officials on both sides were reluctant to concede until some months ago that the U.S. imposed sanctions on Iran would pose a threat to this mega project. Both New Delhi and Tehran were gung-ho about this project when they observed Chabahar Day on February 26 in the port city organised by Iran’s Ports and Maritime Organisation (PMO), but other problems have cropped up since.

SNI has learnt that Tehran is now worried about the tardy pace of the project. It is particularly worried about the equipment which was to come to Chabahar and for which India was footing the bill after India Ports Global Private Ltd that took over the responsibility of running the Shaheed Beheshti terminal in October 2018 scrapped the process for selecting a strategic partner to manage, operate and maintain the port last month. Further, India Ports Global also scrapped the tender to purchase three all-terrain yard cranes, leaving the Iranians worried.

India has been pushing for Chabahar in order to bypass Pakistan and have access to landlocked Afghanistan. Further, the port is also seen as providing India with an alternative route to the Central Asian countries and even beyond. Chabahar port is barely 70 kilometres away from Pakistan’s Gwadar port which is located in Balochistan province and is being built by China.


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