India Ports Global Ltd (IPGL) is looking at innovative solutions to source equipment and push forward the development of the Shahid Beheshti Terminal at Chabahar Port in Iran. Understanding the importance of the port, IPGL and Arya Banader of Iran signed a contract in 2016. Setbacks and hurdles resulted in the project coming to a standstill. However, IPGL is now determined to overcome the long-standing challenges and is thinking out of the box.

The Chabahar Port is of great strategic importance to India. Situated on the southeastern coast of Iran, it serves as a gateway to Afghanistan and Central Asia and offers an alternative trade route that bypasses Pakistan. It can also be interpreted as a step by India to stay ahead of China which has been showing interest in Iranian ports and infrastructure projects. A resolution of the issue will also help sanctions-hit Russia reach the Indian Ocean region through the 13-nation International North South Transport Corridor which passes through Chabahar.

The main hurdle to the development of the port was in the form of equipment procurement. IPGL’s several tenders for the purchase of cranes and container handling equipment went unanswered bringing full scale port operations to a halt.

This has forced IPGL to consider new approaches. The foremost among them is collaborating with entities in the UAE, including Abu Dhabi, Dubai and Sharjah. These ports will finalise contracts with vendors, with India reimbursing the cost in dollars.

Tenders from India are going unanswered due to the apprehensions arising out of western sanctions on Iran due to its nuclear programme. These sanctions have made vendors shy away from bidding for any contract related to Iran.

Indian officials are however optimistic and are actively engaged with UAE port officials to explore various options. Being the only Iranian port with direct access to the ocean, Chabahar Port is considered a gateway to golden opportunities for trade by India, Iran and Afghanistan with Central Asian countries. Both countries realise the importance of the port and recently dropped the foreign arbitration clause, which means India and Iran will not seek commercial foreign arbitration for disputes between users and operators at the port. This, along with India’s moves to rope in the UAE, will hopefully bring in the desired results.