As Chabahar corridor gets built, doubts pile up about project.

Two years ago, Prime Minister Narendra Modi stood with Iran President Hassan Rouhani and Afghanistan President Ashraf Ghani to announce the creation of a trade corridor that would “alter the course of history”.

From the Indian-built port at Chabahar, the Prime Minister said the corridor would “touch South Asia at one end and Europe at another”, and “spur the unhindered flow of commerce throughout the region”.

Now, though, as the port’s building blocks are being assembled, there are growing doubts about the project’s long-term foundations - and signs that Iran has started looking to India’s key regional rival, China, for investment in the port.

Earlier this month, India Ports Global - a joint venture between Jawaharlal Port Trust and Deendayal Port Trust -announced it had signed contracts for the supply of giant gantry and quay cranes, which allow containers to be hauled on to and off ships.

Long delayed by the refusal of Swiss and Finnish firms to bid for contracts, citing worries over US sanctions against Iran, contracts have been won finally by Finland’s Cargotec OYJ and Shanghai Zhenhua Heavy Industries.

But, despite three deadline extensions, India Ports Global has yet to find a private-sector partner to sign on to operate the port, which diplomatic sources have told Business Standard was because of bidder apprehensions about the demand for an upfront fee of about $8.5 million.

Last month, Iranian Foreign Minister Javed Zarif said his country would welcome investment by China and Pakistan in Chabahar — a direct competitor to the high-profile, Beijing-funded port at Gawadar, just 72 km away.
Behind the emerging problems with Chabahar lie growing apprehensions that the ambitious project may not be able to deliver on its promise.

Conceived in 2003, the project now involves a web of projects linking Afghanistan, Iran and India: An $85-million investment in terminals at Shahid Beheshti port, a $1.6-billion railway line from Chabahar to Iran’s Zahedan, up to $8 billion in private sector investments in gas, fertilisers and pharmaceuticals, all linking up to the $11-billion Hajigak iron mines awarded to an Indian consortium.

In time, Modi’s speech made clear, this corridor will act as a hub for the revival of pre-colonial land routes from South to Central Asia, and Europe: An Indian version of the New Silk Roads China is building.

“The original idea,” recalls New Delhi’s former envoy to Kabul, Rakesh Sood, “was to simply bypass the choke-hold Pakistan had on our routes to Afghanistan. It was stopping us from sending everything from wheat to buses to our partner.”

But, in the early years after 9/11, optimism grew on tapping Afghanistan’s mineral resources, leading India to conceive of Chabahar as a potential strategic investment, giving it access not just to Afghanistan’s economy but Central Asia.

BS