Chabahar; Filed Line Between CIS and Free Waters

When India’s prime minister stepped in Tehran in August 2016 to enhance business development, one of the contracts caught eyes specifically which was the transit cooperation in Chabahar port. The Indian prime minister entered Iran with senior staff, putting the economic development between Iran and India at the top of its agenda, and released the finance made of selling Iranian oil to India which was blocked in India during the sanction against Iran to show the interest for cooperation with Iran. India inked many contracts with Iran in energy sector. However, one of these contracts which was read about Chabahar port, the only port connected to the oceans, made Afghanistan’s prime minister to travel to Iran so as to discuss it.

News ID: 74765

Date: 05 July 2017 - 09:43

Why is Chabahar port so important?

According to the latest statistics of UN, Chabahar is located on the main waterway between north and south and enjoys the biggest advantage regarding transship. Furthermore, the features of this port regarding the berthing has put the port within top 100 ports in the world which gives it the opportunity to become a mega port and a hub in the region. Chabahar port has been focused by the leaders in Iran since 1973. However, the port was neglected after war started between Iran and Iraq. The port again started to be the main focus in 1989 and it was announced as a free zone.

The port is far from Persian Gulf and all the political tensions. The advantage along with the proper depth in this port for the mega ships has made Chabahar port a very strategic and precious spot in east south of Iran. One of the advantages of this port is that the port is located in Oman Sea and is connected to Indian Ocean. Chabahar’s location makes costs and time to decrease if the liners start working with it.

Wide bank is another advantage in this port which makes the port suitable for railroad or air transportation and consequently transporting cargo to landlocked countries especially CIS and ECO countries is accessible.

The advantages above made CIS countries to ink a contract in August 2016 to transit cargo in northsouth corridor through Iran and Iranian railroad system along with the seas in the south of Iran.

The area is known as a virgin place with vast land in the bank which can be used to establish the necessary building and organizations and finally build a port city. This is not easy to accomplish it in Bandar Abbas or any other port in Iran and if done, the return of capital takes longer than it should.

Furthermore, China is attempting to develop economically the west side of the country as much as the eastern one. Hence, Chinese authorities have made many trips to Iran to discuss investment opportunities. However, they showed interest to invest on Gwadar port in Pakistan as the most similar option to work on more easily.

Gwadar, a rival or sister port!

Gwadar port is located 200km away from Chabahar port and enjoys the access to the oceans. Chinese authorities started to develop the port and answer to the demand of exporting cargo from China to western Asia, CIS and Africa.

Chinese authorities started to develop means of transportations in Pakistan including roads and railroads between Pakistan and China to feed CIS countries with their products through Gwadar port.

They invested 400m dollar on the above-mentioned areas in 2002 and inked many MoUs with Pakistan.

However, there were two hurdles; security and a rival called India! Pakistan faced many problems due to its political structure and has suffered from the existence of Taliban which threatens security in this country.

NATO forces also exist in Pakistan borders while Afghanistan and Pakistan led wars. Kashmir borders with India also suffer from security which are the most important element to attract investments.

On the other hand, India as the second most populated country in the world is growing fast through taking

advantage of the Chinese theory of using cheap labor force. India is also one of the biggest allies of the

U.S. and is considered an emerging power.

India has typically established good relations with the west and especially America and has managed to establish good relations with Russia too. The atmosphere created through suitable political situation for India has paved the way for this country to grow substantially.

India has moved forward to take advantage of west Asian markets through Chabahar port.

Chabahar port experienced some development projects in parallel with Gwadar port and gradually completed its first phase taking advantage of Iranian budget.

The stop made by Chinese to move forward in Gwadar port gave Chabahar port the opportunity to fill the time gap and compete with Gwadar.

After JCPOA, many negotiations and travels occurred in Iran and Chabahar port became the main focus for Japanese, Dutch, Korean and even Indian investors.

The above-mentioned advantages in Chabahar port along with rich gas and oil reserves and the projects to make it the petrochemical hub in the region counted more advantages that Gwadar port holds.

Furthermore, Gwadar port depends on Iran for electricity and the fuel necessary whether for transportation or bunkering while Chabahar port does not have such problems and enjoys the easy access to cheap fuel and electricity. Such factors have made Chinese to focus on Chabahar once again and invest on it in parallel with Gwadar to compete with Indians.

Because Indians had started sooner than their Chinese rivals to take active steps in Iran, Chinese could only invest on the bank of Chabahar and to clear the atmosphere of competition, they called Gwadar and Chabahar as “sisters” in the meeting of major Chinese and Iranian businessmen.

However, despite the overwhelming security in Iran and the advantages in Chabahar port, the process of development in this port is quite slow.

Conditional development of Chabahar!

The development plan of Chabahar indicates that port, transit, transship, bunkering, the bank and finance are the priorities to develop while Chabahar is planned to become the port and finance hub in the region, similar to Dubai.

Therefore, accomplishing the following directives to align Chabahar region with international standards is a must:

Establishing International airport of Chabahar

- Completing the project of gas line of Asaluye Iranshahr and Chabahar

- Establishing railroad Chabahar- Zahedan-Mashad-Sarakhs

- Removing problems with drinkingwater in the region and completing the related projects

- Increasing the capacity of the Chabahar mega port from 2m ton to 6m ton

- Joining Shahid Kalantari and Shahid Beheshti berths to Chabahar free zone

In fact, developing Chabahar free trade zone is lying on developments in air and land transportation along with marine shipping and providing drinking water and fuel. Furthermore, applying expertise is another factor to fulfill in this region so as to create jobs as well.

One should take it into consideration that considering the above-mentioned facts, Chabahar is capable of turning out to fortify the economy in the near future in Iran.

Today, ports are the main issues in any economy whether to earn foreign exchange or create jobs. In this regard, being located in Oman sea and enjoying virgin bank, Chabahar is considered a strategic and special spot to receive development.

Chabahar is the only port in Iran which enjoys proper depth and consequently is able to provide service for post panamax ships and while the sizes in the ships are changing in the new shipping world, Chabahar can provide the opportunity to receive mega ships. Iran can develop Chabahar port in the areas of transit, transship, bunkering and finance so as to answer the demands in the region and present bright future for Iran.