$120 mn investments, $250 mn credit for Chabahar Port growth
PORTS & SHIPPING

$120 mn investments, $250 mn credit for Chabahar Port growth

The signing of the Long Term Bilateral Contract on Chabahar Port Operations occurred in the presence of HE Mehrdad Bazrpash, Minister of Roads & Urban Development, Iran, and India's Minister of Ports, Shipping, and Waterways Sarbananda Sonowal.

It has been learned that India's 10-year bilateral contract with Iran for the operation of Chabahar Port is expected to attract an investment of around $370 million. This investment consists of a direct contribution of $120 million from India for infrastructure development and a $250 million line of credit to Iran.

India's commitment of $120 million for port development will be utilised to acquire advanced equipment like rail-mounted quay cranes, rubber-tyred gantry cranes (also known as transtainers), reach stackers, and forklifts. Additionally, these funds will be allocated towards the improvement of associated infrastructure.

According to several officials familiar with the matter, the agreement, which spans a decade, has the potential for extension upon mutual agreement, signifying a medium-term objective for India as it proceeds with operations.

Moreover, significant concerns, including the absence of consensus on an arbitral framework, have been resolved. This issue stemmed from a previous deadlock in negotiations when Iran refused to accept an international arbitration framework, citing the necessity for a constitutional amendment. Conversely, India insisted on including the arbitration clause to ensure transparency in resolving disputes.

Officials stated that under the agreement signed, disputes requiring arbitration will be referred to the Singapore International Arbitration Centre.

Additionally, a concern regarding cargo movement emerged during the later stages of the negotiation process. According to sources, Iran insisted on a minimum guaranteed traffic (MGT), a standard provision in concession-based port agreements. Failure to meet the minimum cargo requirement could lead to penalties for the concessionaire.

The signing of the Long Term Bilateral Contract on Chabahar Port Operations occurred in the presence of HE Mehrdad Bazrpash, Minister of Roads & Urban Development, Iran, and India's Minister of Ports, Shipping, and Waterways Sarbananda Sonowal. It has been learned that India's 10-year bilateral contract with Iran for the operation of Chabahar Port is expected to attract an investment of around $370 million. This investment consists of a direct contribution of $120 million from India for infrastructure development and a $250 million line of credit to Iran. India's commitment of $120 million for port development will be utilised to acquire advanced equipment like rail-mounted quay cranes, rubber-tyred gantry cranes (also known as transtainers), reach stackers, and forklifts. Additionally, these funds will be allocated towards the improvement of associated infrastructure. According to several officials familiar with the matter, the agreement, which spans a decade, has the potential for extension upon mutual agreement, signifying a medium-term objective for India as it proceeds with operations. Moreover, significant concerns, including the absence of consensus on an arbitral framework, have been resolved. This issue stemmed from a previous deadlock in negotiations when Iran refused to accept an international arbitration framework, citing the necessity for a constitutional amendment. Conversely, India insisted on including the arbitration clause to ensure transparency in resolving disputes. Officials stated that under the agreement signed, disputes requiring arbitration will be referred to the Singapore International Arbitration Centre. Additionally, a concern regarding cargo movement emerged during the later stages of the negotiation process. According to sources, Iran insisted on a minimum guaranteed traffic (MGT), a standard provision in concession-based port agreements. Failure to meet the minimum cargo requirement could lead to penalties for the concessionaire.

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