No dilution in India-Iran commitment to jointly develop Chabahar - Zahedan rail project

India has expressed its commitment to jointly develop Chabahar - Zahedan rail project and refuted reports of it being removed from the project.

Indian govt sources said, “Both sides remain committed to Chabahar-Zahedan railway project."

Adding, "We are very much in the game but progress is slow due to current political environment". 

New Delhi sees the various connectivity projects in the West Asian country as the "paradigm driving India-Iran relations". The Chabahar - Zahedan port & rail project and the International North-South Corridor (INSTC) from Mumbai to Moscow that passes via Iran are key connectivity projects both countries are working on. Chabahar port project is the better known of these connectivity projects.

Indian government sources said, "Both vectors enjoy a great deal of convergence among decision-makers in the two countries and beyond. This is therefore not merely an India-Iran initiative but one which generates considerable interest from Central Asian Republics and the Republic of Azerbaijan."

According to Iran media reports, Iran Railway on July 7 started laying track for the 628 km railway project with 150 km section to be completed by March 2021. The full length of the track is expected to be completed by March 2022.

There are two components of the massive connectivity project that will connect India to Afghanistan via Iran. First being the substructure --concrete bed on which rail tracks are mounted, bridges laid or tunnels dugout, etc. This is standard work in any railroad project and superstructure viz. signalling systems, rolling stocks/wagons, locomotive engines, etc.

Under the bilateral agreement, Iran is to lay the substructure which has seen delays due to lack of funds. Upon completion of substructure, India will supply the stock and operationalisation is to be done jointly.

Another hiccup has been that Iran was procuring steel from Indian suppliers. This has been suspended due to US sanctions as steel is a sanctioned commodity. Presidential elections next summer and domestic politics are also in play in the country and that sources believe does impact the project.

During PM Modi's 2016 visit to the West Asian country, India and Iran signed MoU on the construction of Chabahar-Zahedan railway line which forms part of transit and transportation corridor in a trilateral agreement between India, Iran and Afghanistan. MoU was between India's IRCON and Construction, Development of Transport and Infrastructure Company (CDTIC) of Iran.

As regards financing, broad terms have been agreed upon and these are approximately in the range of $800 million.