Why India’s work on Iran’s Chabahar Port is stalled despite US exemption

Uncertainty looms large over the future of the strategically-important Chabahar Port that India is building in Iran’s Sistan-Baluchistan province.

Despite India getting exemption for the development of the port from the sanctions imposed by the United States on Iran last November, the European and Chinese suppliers who had won the bid to supply equipment for the port are now reluctant to deliver, fearing adverse impact on their business with the US, senior government officials familiar with the matter said.

The US imposed the sanctions in November 2018 after pulling out of the nuclear deal it signed with Iran in 2015. ThePrint reported Saturday that the US Secretary of State Mike Pompeo is likely to reiterate his government’s stand to exempt India from sanctions on the use and development of the Chabahar Port during his visit next week.

Critical Equipment
The suppliers in question include Cargotec OYJ, the Finnish crane maker, which won the bid last year to supply 14 rubber-tyred gantry cranes, and Chinese crane maker Shanghai Zhenhua Heavy Industries Company Limited, which is to supply four rail-mounted quay cranes.

“Though the US has said that the Chabahar Port is exempted from sanctions, there is nothing in writing. These are big companies and don’t want to jeopardise their business for operating in Iran, and that too for this one project,” a senior shipping ministry official who did not wish to be identified told ThePrint.

“These heavy-duty equipment are critical for developing the port, and are manufactured mostly by European and Chinese companies. We cannot source them locally.”

Arun Kumar Gupta, managing director of the government-owned India Ports Global Private Limited (IPGPL), which is implementing the Chabahar project, added: “The two companies have not started supply of equipment so far. They have informed us that they have applied for exemption from sanctions before doing business in Iran.”

Source:- The Print