Dubai: India has been given the go-ahead to develop Iran’s Chabahar Port, from which India will import commodities like urea and crude oil.
In return, Iran has promised to supply natural gas at $2.85 per unit if India builds a fertiliser plant in the Gulf country.
Chabahar Port will be developed through a special purpose vehicle (SPV), which will invest $85.2m year to convert the berths into a container terminal and a multi-purpose cargo terminal. An agreement for development of the port is likely to be signed shortly.
Construction work will completed in about 18 months’ time, Nitin Gadkari, India’s road transport and shipping minister, told press yesterday.
Producing urea in Iran would cut costs by 50% compared to India’s domestic output, and negate the need for government subsidies, Gadkari said.
India intends to lease two berths at Chabahar for 10 years.
Last month, India’s Cabinet cleared a proposal to form a joint-venture company that would develop Chabahar port in Sistan-Baluchistan province on Iran’s south-east coast, outside the Middle East Gulf. [6/11/14]