India's participation in the development of Chahbahar port in Iran

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its approval for the framework inter-Governmental Memorandum of Understanding (MoU) that is to be finalised by the Government of India with the Government of Iran.  This inter-Governmental MoU will have the following main elements:-          i.            An Indian Joint Venture (JV) company will lease two fully constructed berths in Chahbahar port’s Phase-I project for a period of ten years, which could be renewed by “mutual agreement”.        ii.            The JV company will invest US $ 85.21 million for equipping the two berths within 12 months as a container terminal and the second as a multi-purpose cargo terminal.       iii.            The Indian side will transfer ownership of the equipment to be provided through the investment to Iran’s port and Maritime Organisation (P&MO) without any payment at the end of the tenth year.      iv.            The Indian side can form a JV that could include one or more Iranian companies subject to the approval of the P&MO.         v.            The Indian and Iranian sides could enter into subsequent negotiations for participation in the construction, equipping and operating of terminals in Phase-II on BOT basis, subject to the Indian side’s satisfactory performance in Phase-I.      vi.            The Iranian side will make efforts to provide Free Trade Zone conditions and facilities at the port. The Cabinet also approved to constitute a JV or other appropriate Special Purpose Vehicle (SPV) comprising the Jawaharlal Nehru Port Trust (JNPT) and the Kandla Port Trust (KPT) and if required a local Iranian partner and/or an Indian private sector partner to serve as the vehicle for India’s participation in the development of the port.  Approval was also given for incurring annual revenue expenditure of US$ 22.95 million to support operational activities of the Indian JV. India’s presence at the Chahbahar port would give it a sea-land access route into Afghanistan through Iran’s eastern borders. Background Iran's Chahbahar port located in the Sistan-Baluchistan Province on Iran's south-eastern coast is a port of great strategic utility for India. It lies outside the Persian Gulf and is easily accessed from India's western coast. From Chahbahar port using the existing Iranian road network, one can link up to Zaranj in Afghanistan which is at a distance of 883 km from the port and then using the Zaranj-Delaram road constructed by India in 2009, one can access Afghanistan's garland highway thereby establishing road access to four of the major cities of Afghanistan; Herat, Kandahar, Kabul and Mazar-e-Sharif. Approval for Ahmedabad Metro Rail Project Phase-1 The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its approval for Ahmedabad Metro Rail Project Phase-1 covering a length of 35.96 km at a total project cost of Rs. 10,773 crore.  The details are given below:-          i.            Phase-1 will cover a length of 35.96km along two corridors viz. North-South Corridor covering 15.42 km from APMC to Motera Stadium and East-West Corridor covering 20.54 km from Thaltej Gam to Vastral Gam.        ii.            Total project cost of Rs.10,773 crore with Govt. of India contribution of Rs. 1,990 crore in the form of equity and subordinate debt.       iii.            Project to be implemented by Metro-Link Express for Gandhinagar and Ahmedabad (MEGA) Company Ltd., which will be converted into a 50:50 jointly owned company of the Government of India and Govt. of Gujarat.      iv.            Project to be covered under the legal framework of the Metro Railways (Construction of Works) Act, 1978; the Metro Railways (Operation and Maintenance) Act, 2002; and the Railways Act, 1989, as amended from time to time. The proposed two alignments are expected to provide much needed connectivity to the commuters and would traverse through some of the densest and traffic congested areas of Ahmedabad. It will considerably reduce traffic congestion and will bring in fast, comfortable, safe, pollution-free and affordable mass transportation system for the people of Ahmedabad. This would in turn contribute to further development and prosperity of the area. Development and prosperity of Ahmedabad will also contribute to the prosperity and development of the nation. The Ahmedabad Metropolitan Area, which has a population of 6.3 million will be benefitted. Out of the total project cost of Rs.10,773 crore, the Government of India will contribute  Rs. 1,990 crore in the form of equity and subordinate debt. Background: Ahmedabad is the seventh largest metropolis in India and accounts for 12 percent of the population of Gujarat.  The region has witnessed a growth rate of 2.25 percent over the last decade. At present, Ahmedabad is the district headquarters and the High Court and many offices of the Central Government are also located there. The future forecast of population based on the projections done as a part of the Integrated Mobility Plan for the Ahmedabad-Gandhinagar Region, 2031 projects the population as 1.1 crore for the horizon year of 2043. About 70 percent of this population will be residing in the Ahmedabad Metropolitan Corporation (AMC) area. Bus augmentation will not be able to cater to the increased public transit load and passengers will shift to private modes which is already evident from the high vehicle ownership trend in the region. This would not only aggravate congestion on the streets but also increase pollution. Hence, a Metro Rail System in Ahmedabad has become essential.