The Jawaharlal Nehru and Kandla port trusts are in discussion with the government of Iran for operating a multi-purpose terminal at the port of Chabahar on the Gulf of Oman, near Iran’s border with Pakistan.
JNPT, the country’s largest container port at Navi Mumbai, and Kandla in Gujarat’s Kutch, the largest port by total cargo, will come together to form a Special Purpose Vehicle to operate the terminal at Chabahar, under a revenue-share agreement with the Port and Maritime Organisation, Iran.
The agreement would be for a minimum of 20 years.
The two major ports are likely to seek financial assistance from the external affairs ministry to operate Chabahar, of strategic interest to India for decades.
The Union shipping ministry finds the project financially unviable and, therefore, wants the external affairs ministry -- which is piloting the project -- to provide a one-time capital grant and an annual grant to make the project sustainable.
“We are in the process of formulating a Cabinet note asking for a grant, since it has to make financial sense for the Indian ports to invest in the terminal.
“The final decision in this matter has to be taken by the external affairs ministry,” a senior government official said.
Experts said Chabahar’s economic potential cannot be estimated in the short run and can be done only after a certain time frame.
The estimated project cost is around $100 million. The port project has been delayed because of various reasons, including the US and European Union sanctions on Iran because of its nuclear programme.
It is believed Chabahar would give India an unprecedented geopolitical network.
Because of its strategic location near the landlocked countries of Afghanistan and Turkmenistan, India would get road access to these countries.
“This project could give us access to the Turkmenistan and Iran pipeline, since India could operate the LNG terminal at Chabahar.
“We can also readily approach Central Asia and not be blocked by Pakistan,” said Talmiz Ahmed, former ambassador to the United Arab Emirates. The Gwadar port in Baluchistan, Pakistan, in the vicinity of Chabahar, was taken over by China, making Chabahar a strategically important location for India.
If the two Indian ports start operating the Chabahar terminal, it is going to be the first abroad investment by the government-owned ports.
In 2011, the shipping ministry was toying with the idea of setting up a company called India Ports Global to invest in port facilities overseas for strategic and commercial reasons.
The project never took off and was not on the agenda of the government in the past couple of years.