News ID: 208009
Published: 0121 GMT January 12, 2018

Iran, India to sign transport agreements worth $2b

Iran, India to sign transport agreements worth $2b
Abbas Akhoundi, Iranian Minister of Transport and Urban Development, during an interview at Islamic Republic of Iran in New Delhi on Friday. | Photo Credit: Shiv Kumar Pushpakar

Iran and India have agreed to sign deals worth 2 billion dollars in railway transportation and Chabahar Port development project, Iran's minister of Roads and Urban Development said .

In an exclusive interview with IRNA in New Delhi on Friday, Abbas Akhoundi said the two sides discussed three important issues during the meeting, including the development of the Chabahar to Zahedan railway worth one billion dollars, production of 200 locomotives for freight trains and the joint production of rails between India and Iran.

The Iranian minister said an Indian delegation had a visit to Iran last week to make the necessary inspections on the project of development of the Chabahar to Zahedan railway.

Akhoundi said that the project of producing of 200 locomotives for freight trains is also important and India is ready to fund the project.

Saying a portion of the locomotives will be produced in Iran, he estimated the project to cost 600 million dollars.

“The project will be completed in three years. India has immensely focused on developing its railway industries and has up-to-date technologies, so cooperating with India for Iran means gaining access to the latest technology in the world in this particular field,” the minister added.

“The third issue which was negotiated with India was the joint production of rails between India and Iran. Part of the rails will be purchased directly from India, but most part will be produced at Esfahan Steel Company. This Iranian company can receive 400,000 tons of steel from India,” Akhoundi said.

The government of India is also interested in financing the project, the minister said, Iran will try to turn these issues into an official and operational agreement during the upcoming visit of Iranian President Hassan Rouhani to India.

First phase of Chabahar port development project is of prime importance for both countries. India sees Iran’s Chabahar Port project as a golden opportunity for New Delhi to enhance its regional role and cooperation.

India has reiterated its commitment to complete and operationalize the Port at the earliest that would contribute to bilateral and regional trade and economic development and also provide alternate access to landlocked Afghanistan to regional and global markets.

India managed to transit its first tranche of 110,000 tons of wheat from India to Afghanistan through the Chabahar Port based on a Trilateral Transit and Trade Agreement signed in May 2016 between India, Iran and Afghanistan.

President Rouhani opened the first phase of Shahid Beheshti Port in the southeastern city of Chabahar on Dec. 3, 2017 during a ceremony attended by 60 foreign guests from 17 countries.

As Iran's only oceans port and thanks to its very sensitive geopolitical position, Chabahar plays a vital role in connecting India to Afghanistan, Central Asia and Europe.

India has committed $500 million to building two berths at Chabahar to process trade and develop an economic zone around them, as well as $1.6 billion for a 650-km rail link from Chabahar to Zahedan and into Afghanistan. Iran is completing the current construction at Chabahar at a cost of $340 million.

“We have very good relations with India,' Akhoundi said in an assessment of his visit to India, “We entered the stage of partnership in our relations with New Delhi. These partnerships are in the areas of the Chabahar port development projects and railways.”

Akhundi arrived in the Indian capital on Wednesday on a three-day visit to promote transportation cooperation between the two countries.

He was accompanied by a delegation comprising of officials from government and private sector companies.

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