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India dropped from Chabahar rail project

Tuesday, 14 Jul 2020
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The Iranian government has decided to proceed with construction of a rail line from Chabahar port to Zahedan on its own, citing delays from the Indian side in funding and starting the project. 
 
Four years back India and Iran had entered an agreement to construct the rail line from Chabahar port to Zahedan, along the border with Afghanistan.  
 
Iranian Transport and Urban Development Minister Mohammad Eslami inaugurated the track-laying process for 628 km Chabahar-Zahedan line, which will be extended to Zaranj across the border in Afghanistan. 
 
The entire project will be completed by March 2022. The Iranian Railways will proceed without India’s assistance, using approximately USD 400 million from the Iranian National Development Fund. 
 
The railway project, which was being discussed between the Iranian Railways and the state-owned Ircon International (IRCON), was meant to be part of India’s commitment to the trilateral agreement between India, Iran and Afghanistan to build an alternate trade route to Afghanistan and Central Asia. 
 
In May 2016, during Prime Minister Narendra Modi’s visit to Tehran to ink the Chabahar pact with Iranian President Rouhani and Afghanistan President Ghani, IRCON had entered anMoU with the Iranian Rail Ministry. 
 
The MoU was to construct the Chabahar-Zahedan railway as part of transit and transportation corridor in trilateral agreement between India, Iran and Afghanistan. For this, IRCON had pledged to provide all services, superstructure work and financing for the project worth around USD 1.6 billion.
 
However, despite several site visits by IRCON engineers, and preparations by Iranian railways, India never began the work. The US had provided a sanctions waiver for Chabahar port and the rail line to Zahedan, but it has been difficult to find equipment suppliers and partners
 
Moreover, Iran and China are close to finalising USD 400 billion strategic partnership deal for 25 years which will include Chinese involvement in Chabahar’s duty-free zone, an oil refinery nearby, and possibly a larger role in Chabahar port as well.

 

 
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