No response from Iran on Chabahar railway line since December: MEA

No response from Iran on Chabahar railway line since December: MEA

Iran has informed government it will go it alone on Farzad-B gas project too

The Government of India says it has not received any response from Iran since December 2019 on the future of the Chabahar-Zahedan railway project that State-owned railway construction company IRCON was to have constructed and financed, and ONGC’s foreign arm OVL is also out of the Farzad-B gas field exploration project.

The government cited policy changes by the Iranian government, Iran’s precarious finances, and the U.S. sanctions situation as the reasons behind the decisions on Indian infrastructure projects in Iran, which would both be undertaken through local companies instead.

Last week, Iranian railways and its transport department inaugurated laying of track for the 628-km stretch from the southern port city of Chabahar to Zahedan on the border with Afghanistan and officials had told The Hindu that the track would now be funded by Iran’s own National Development fund.

According to the Ministry of External Affairs (MEA), IRCON had completed its site inspection and review of the feasibility report for the project last year as per an MoU signed between India and Iran during Prime Minister Narendra Modi’s visit in 2016.

“Detailed discussions were thereafter held on other relevant aspects of the project, which had to take into account the financial challenges that Iran was facing,” said MEA spokesperson Anurag Srivastava responding to questions on various infrastructure projects in Iran, including the report by The Hindu on the railway line.

“In December 2019, issues [on the railway line] were reviewed in detail at the 19th India-Iran Joint Commission Meeting in Tehran. The Iranian side was to nominate an authorized entity to finalize outstanding technical and financial issues. This is still awaited,” Mr. Srivastava stated but declined to comment specifically on Iran’s decision to begin the project without India.

On Wednesday, Farhad Montaser, an official in Iran’s Ports and Maritime Organization, said India’s MoU for the rail line had never fructified in an agreement. “We had a list of Indian investments in Chabahar port, which also included the issue of Chabahar railway infrastructure and the railway but during the negotiations, it was not agreed [upon],” he told official news agency IRNA.

The MEA also confirmed that India is no longer involved in the Farzad-B gas field project where ONGC had originally signed an agreement for exploration in 2002, investing approximately $100 million thus far. The MEA said “policy changes” in Iran were responsible for the decision but didn’t give details.

“In January 2020, we were informed that in the immediate future, Iran would develop the field on its own and would like to involve India appropriately at a later stage. This matter remains under discussion,” Mr. Srivastava said.

India had proposed to invest $1.6 billion in the Chabahar Zahedan railway line, and approximately $6 billion in the Farzad-B gas field project.

Chabahar Port project

The MEA said India’s main investment in the Chabahar Port where it has taken over operations of one terminal, had progressed well in the last few years, handling 82 ships with 12 lakh tonnes of bulk cargo in 8200 containers since December 2018.

“Despite the difficulties posed by the [U.S.] sanctions situation, there has been significant progress on the port project. Proactive measures are currently under way to increase the usage of Chabahar Port, both for Afghanistan and Central Asia,” Mr. Srivastava said at the briefing.

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