December 1, 2023
Development of the port of Chabahar on the Gulf of Oman appears to have ground to a halt yet again as the Indian state agency handling the project has now canceled all the tenders it issued a year ago for the purchase of cranes and container handling equipment.
The project is years behind schedule and may never be completed. India and the United States both wanted the project because it enabled India to help the Afghan government with trade and investment. But since the pro-Western Afghan government fell, Indian interest has plummeted and the Americans appear to oppose the project outright. The US has canceled the sanctions exemptions they had previously issued to allow the investment in the Iranian port and in a railway from there to Afghanistan.
In September 2022, India Ports Global Ltd. (IPGL) issued a tender to acquire tons of gear for the port. The timeline for submitting offers on these tenders was repeatedly extended as bidders hesitated to participate because of the sanctions imposed by Western countries on Iran.
On September 18 this year, IPGL officially canceled all the tenders without providing specific reasons.
The delay has disrupted the official launch of the 10-year contract for operating Chabahar Port. India and Iran have resorted to operating the port through annual short-term interim contracts.
While IPGL was seeking equipment worth approximately $112 million, the Indian government budgeted only $14 million for the development of Chabahar port, reports India’s Economic Times.
The Economic Times stated that the 10-year contract has not been activated yet due to obligations unmet by both sides, primarily because of the sanctions.
India’s involvement in Chabahar is believed driven by strategic and geopolitical considerations rather than commercial profitability.