Chabahar fast-track to beat US sanctions

Industry Database

A deal to hand the operation of Iran’s Chabahar Port to India has been sped up after being hampered by a pay dispute and impending US sanctions on Iran.

India and Iran are working on amending the clause that mandates activation of the deal with the application for payment of $18m made by Iran under consideration, reported Zee Business.

India was initially due to pay $150m to Iran as part of the May 2016 pact that it would operate Chabahar for 10 years.

However, India was accused of delaying the development process and that Iran didn’t submit the application seeking payment on time and kept changing its decisions.

“A few amendments are likely to be made soon before things can move to signing of the main contract,” a senior government official aware of the development said.

An agreement for the start of interim operations was signed on May 6, but following this, the US announced its decision to re-sanction Iran, expected in November. This slowed the process as India is not able to provide a bank guarantee for the project.

“So even the interim operation is in a slight problem. We should have started the operations by June. Everything is ready, but not being able to provide bank guarantee is a problem. So certain amendments are being made even is this regard, following which we can hope to start interim operations by November,” a senior official said.

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