Iran: Chabahar Port promise and nuclear deal threat

New Iranian port eases India trade into Afghanistan and benefits the economy as US nuclear-deal opposition looms large.

Chabahar Port
President Hassan Rouhani poses during the inauguration of a newly built extension of the port of Chabahar on Sunday [Ebrahim Noroozi/AP]

Iran has launched one of its major post-nuclear deal projects – the port of Chabahar – pushing further for engagement with the global community, days before the US Congress’ expected decision on whether Washington will pull out of the landmark international accord.

On Sunday, President Hassan Rouhani officially inaugurated the southeastern port in Iran’s Sistan and Baluchestan province with great fanfare as officials from 17 countries attended a ceremony marking the opening of a new extension of the strategic trade corridor.

The Chabahar port’s development was accelerated after Tehran signed the nuclear pact, formally known as the Joint Comprehensive Plan of Action, with Washington and five other major powers in 2015 to put curbs on its disputed nuclear programme in exchange for relief from punishing economic sanctions.

In a visit by reporters earlier last week, Swiss-made cranes installed in the first operational jetty were unloading containers bearing the trademark of Iran’s national shipping company – Islamic Republic of Iran Shipping Lines (IRISL) – off a vessel that had just arrived from India carrying wheat shipments, which will be trucked to Afghanistan. It was the third consignment arriving this year as part of a contract to transit 1.1 million tonnes of wheat from Indian ports to the landlocked neighbouring country.

Containers are moved to the vast empty area of the Shahid Beheshti container terminal whose construction was recently completed. Equipment financed through an $85m investment by India will be supplied by companies in Europe and Asia to fill the empty lot.

Soon, Shanghai Zhenhua Heavy Industries Co Ltd (ZPMC) will supply four gantry cranes to accommodate large container ships in the first 8.5 million-tonne jetty.

Once two-thirds of this capacity is realised, five other jetties will be built to increase the capacity of the port to 82-85 million tonnes. Planned completion of another under-construction multi-purpose terminal and a 610km north-south railway to Afghanistan and Central Asia will turn the port into a strategic asset to India in the face of its geopolitical rivalry with China and Pakistan.

Those nations are developing the $46bn China Pakistan Economic Corridor that winds down to Pakistan’s port of Gwadar, less than 100km from Chabahar.

“This is a strategic route for India,” Amirhossein Esmaeili, director of Shahid Beheshti Port Terminal’s Development project, told Al Jazeera. “For them to carry goods to Afghanistan via Pakistan is either impossible because of security concerns or it is subject to excessive costs.”

At a press conference last week, the head of Sistan-Baluchestan’s Ports and Maritime Bureau said costs for each 20-foot container were $1,000 lower if transported through Chabahar to Afghanistan compared with the Pakistan route.

Nuclear deal spoils

A few months after the nuclear deal with Iran went into effect in January 2016 and sanctions were lifted, Indian Prime Minister Narendra Modi visited the country where he agreed to open a $500m line of credit to develop the port – nearly half of what Iran is planning to invest. The lifting of embargoes enabled Iran to enter negotiations with India, China, and Europe on investment and supply of equipment.

However, the burgeoning success of Chabahar and other post-sanctions deals Iran has signed are now overshadowed by United States’ opposition to the nuclear deal.

Despite International Atomic Energy Agency saying Iran has fully adhered to the terms of JCPOA, US President Donald Trump – an outspoken opponent of the accord – refused to “certify” that Iran was in compliance. This gave the Republican-dominated Congress 60 days to decide if Washington should put sanctions back in place.

Iranian officials have noted the fact that other signatories to the nuclear deal – China, Russia, Germany, the UK, and France – still stand by it.

Asked whether Iran is prepared for the US to return to sanctions, Mohammad Rastad, Iran’s Deputy Transport Minister in ports and maritime affairs, said: “Nothing’s happened as yet, has it?”

“We have held successful negotiations with international partners following the JCPOA,” Rastad told Al Jazeera. “We think these investments will help further foster our international relations. We hope this will help us bring about better future for our port and maritime activities.”

Billions of trade and investment deals were signed in the wake of the nuclear deal between Iranian companies and those in India, China, Russia, Western Europe and the US itself.

Aside from the United States, all other parties to the nuclear deal have defended it, stressing it has been effective.

Siding with Iran’s regional rival Saudi Arabia and arch foe Israel, the Trump administration has accused Tehran and its elite military force, the Islamic Revolutionary Guards Corp (IRGC), of creating instability in the region by test firing long-range missiles and trying to increase influence in Yemen, Iraq, Syria, and Lebanon by supporting militias there.

Iran says its missile programme is for defensive purposes and denies the other accusations.

In late October, the US Treasury Department added major IRGC-linked companies such as the port construction and operation companies Tidewater Middle East Co and Iran Marine Industrial Company to its SDN list. IRGC-affiliated firms have had a significant share in Iran’s port activities.

IRGC’s economic arm, Khatam Al-Anbia Construction Headquarters, has been a big player in the construction of the port of Chabahar in particular.

So far, India has received the go-ahead from the US with regards to its economic activities in Chabahar.

US Secretary of State Rex Tillerson was quoted as saying in a visit to India in October that his country does not want to “interfere with legitimate business” done with Iran, “whether they be from Europe, India or agreements that are in place or promote economic development and activity to the benefit of our friends and allies”.

Whether Tillerson’s words still stand remains to be seen.

Source: Al Jazeera