Union Cabinet chaired by the Prime Minister Narendra Modi on 24 February 2016 approved the proposal for loan of 150 million US Dollars to Iran for the development of Chabahar Port.
The credit will be provided from EXIM Bank and was made by Union Ministry of Shipping.
The Cabinet authorized the Ministers of Finance, External Affairs and Shipping to approve the final contract with Iran and for resolution of any issue arising in implementation of the project.
It also authorized the Union Ministry of Shipping to form a Company in Iran for implementing the Chabahar Port Development Project and related activities.
As per the Memorandum of Understanding (MoU) signed between India and Iran on 6 May 2015, India on a ten year lease will equip and operate two berths in Chabahar Port Phase-I with capital investment of 85.21 million US dollars and annual revenue expenditure of 22.95 million US dollars.
The Iranian side had appealed for provision of a credit of 150 million US dollars in accordance with the MoU. Post signing of the contract, the operation of two berths would commence within a period of maximum 18 months.
The ownership of equipment will be handed over to Iran after 10 years or extended period based on the mutual agreement.
The two berths will be operated by the India Ports Global Private Limited, a Company promoted by the Jawaharlal Nehru Port Trust and Kandla Port Trust - two major ports working under the Union Ministry of Shipping.
About Chabahar Port
It lies outside the Persian Gulf in Iran and will help in expanding maritime commerce in the region. India negotiated the project to facilitate the growing trade and investment with Iran and other countries in the region, notably Afghanistan and also to provide opportunities to Indian companies to penetrate and enhance their footprint in the region.
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Who: Union Cabinet
When: 24 February 2016