After pledging about Rs 500 crore for developing two existing berths at the Chabahar port off Iran’s south-eastern coast, India is now planning to invest over Rs 1 lakh crore for setting up various projects, including a urea plant, at the Chabahar port special economic zone (SEZ) area provided the nation on the Persian Gulf ensures gas at a lower rate.
Iran has already offered to supply gas to the proposed Indian units at the SEZ area at $2.95 per mmBtu, which is nearly double the price of $1.5 per mmBtu demanded by India.
Addressing a press conference here, road transport and highways and shipping minister Nitin Gadkari said India would further negotiate on the gas price after it assessed the potential investment proposals being vetted by various ministries by September 28. The proposed investment in the Chabahar port would also be finalised soon.
“After getting the proposals, we will discuss the issue with the Prime Minister and the PMO following which we would approach Iran for further negotiations. India is ready to invest over Rs 1 lakh crore in Iran, but all will depend on the price of Iranian gas to us,” Gadkari said.
India continued to maintain a friendly relation with Iran even when the western nations isolated it for its nuclear programme. Following the easing of sanctions by the US and the western world, Iran has become all the more potential investment destination for India for various strategic reasons.
The proposed urea plant could be a big gain for India and would reduce its urea import bill and thereby subsidies on this most commonly used fertiliser. India imports around 8-9 million tonnes of the nitrogenous fertiliser annually. “If the urea plant is set up in Iran, it will result in slashing of urea prices in India by 50% and cut the subsidy on urea, which is roughly Rs 80,000 crore now,” Gadkari said.
On the modernisation of the country’s 12 major ports, which are reporting moderate growth in terms of cargo handling and operational profits after staging a poor show for a long six years ending FY14, Gadkari said his ministry plans to improve their efficiencies by increasing the level of mechanisation to 80% from 60% now and the average turnaround time to less than 2 days from 4 days now. The cargo handling capacity of the ports would also improve by around 400 MT to 1,230 MT in the next two years.
Asked about the investment that would be required to make for these proposals, he said money would not be a constraint since all the funds would be spent by the ports themselves. In addition to the existing one, four other ports would also equipped to handle cape-size vessels, he said. Along with the minor (private-sector) ports, the total cargo handling capacity of Indian ports would be 2,000 MT by 2018 from around 1,400 MT now. He said the port Trusts would be given more powers to improve operational efficiencies by making necessary change in laws, as the plan for corporatisation of major ports had hit political hurdles.