Iran Drops India From Chabahar Railway Project Citing Delay In Funds

Iran Drops India From Chabahar Railway Project Citing Delay In Funds

This move by Iran comes at a time when Iran finalizes a sweeping 25-year economic and security partnership with China worth $400 billion.

Tehran| Citing delays from the Indian side in funding and starting the project four years after an agreement was signed, the Iran government has decided to move ahead with the construction of rail line from Chabahar port to Zahedan, along the border with Afghanistan, on its own.

Iranian Railways will proceed without assistance from India and will use approximately $400 million from the Iranian National Development Fund for the project that’s scheduled to be completed by March 2022, the Hindu reported.

This move by Iran comes at a time when Iran finalizes a sweeping 25-year economic and security partnership with China worth $400 billion, expanding Chinese presence banking, telecommunications, ports, railways, and dozens of other projects.

According to an Iranian official, in exchange, China would receive a regular and an oil trader, heavily discounted — supply of Iranian oil over the next 25 years.

Deepening military cooperation, potentially giving China a foothold in the region are also some of the things described in the 18-page document detailing the proposed agreement.

This agreement is said to be against the interest of India in the region. The railway line was finalised in May 2016 during Prime Minister Narendra Modi’s visit to Tehran where had signed the Chabahar agreement with Iranian President Rouhani and Afghanistan President Ghani.

To build an alternate trade route to Afghanistan and Central Asia was part of India’s commitment to the trilateral agreement between India, Iran, and Afghanistan. Indian Railways Construction Ltd (IRCON), owned by the government, had promised to provide all services, superstructure work and financing for the project (around $1.6 billion).

Despite several site visits by IRCON engineers, probably considering the sanctions by the US on Iran, India never started the work on the railway line.

India found it difficult to find equipment suppliers due to worries they could be penalised by the US despite giving a sanctions waiver for the Chabahar port and the rail line, the Hindu reported.

The Ministry of External Affairs and IRCON have declined to comment on the issue.


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