Iran has plans to link Chabahar and Gwadar ports as it feels that linking the two will strengthen bilateral trade and bring prosperity in the region. Speaking to a Pakistani newspaper ‘Business Recorder’ the Ambassador of the Islamic Republic of Iran to Pakistan said that potential of the two ports could be utilised better by connectivity through rails.
In a veiled dig to India, the ambassador said: “Some are trying to present these two ports as competitors to each other, while we do not take it as a competition but a compliment to each other.”
Chabahar and Gwadar ports have been the zone of India – China rivalry due to their geo-strategic location. India aims to reach Afghanistan and Central Asia via Chabahar as the Pakistan route is not politically viable. The Chabahar port is funded by India under the tripartite Preferential Trade Agreement (PTA) with Iran and Afghanistan, signed on May 23, 2016. The Gwadar port is being managed by China under the China Pakistan Economic Corridor (CPEC). The contemporary literature from India has repeatedly claimed that Chabahar is a counterbalance to Gwadar.
In addition to the expansion of the Chabahar port, India had also agreed to lay a railway track between Chabahar – Zahedan – Zaranj. In May 2016, Prime Minister Narendra Modi visited Tehran and signed an agreement on Chabahar with Iranian President Rouhani and Afghanistan President Ghani. The state owned Indian Railways Construction Ltd (IRCON ) had signed an MoU with the Iranian Rail Ministry to construct the Chabahar-Zahedan railway as a part of transit and transportation corridor in the trilateral agreement between India, Iran and Afghanistan. IRCON role was to provide all services, superstructure work and financing for the project worth around $1.6 billion. Subsequently, India dragged its feet on the project in fear of the US sanctions. Although Inda had obtained sanction waivers from the US for the Chabahar port and the rail project, it was unable to find suppliers who backed away due to the fear of US sanctions.
In July 2020, the Iranian government announced its decision to proceed with the construction of the rail line on its own blaming India for delays in funding and starting the project. The announcement came amid the news that Iran had signed a 25-year, $400 billion strategic partnership deal with China. Iran has also offered China to operate the Chabahar duty free zone.
On 2nd October, the Deputy Minister of the Iranian Transport and Urban Development Kheirollah Khademi said that the Khaf-Herat railway station will be completed by end of Autumn. Khademi said part of the railway will be constructed by Iran with Afghanistan doing the remaining part. Khaf-Herat railway, 35km in length, will connect the Iraqi rail network to Central Asia. Khaf-Herat railway is being constructed to make Chabahar Port in southeastern Iran and Bandar Abbas, south Iran, more accessible for shipping.
Iran first proposed to link Chabahar and Gwadar Ports to Pakistan in May 2019 after the Indian Government succumbed to the US pressure and stopped buying crude oil. The idea of linking the two ports by a rail line is also not new. In October 2017, a Pakistani Urdu daily Nawa-e-Waqt had reported that Iran had suggested joining Pakistani port of Gwadar with Iranian harbour Chabahar through railway line. The news report also said that linking Gwadar through railway line is a major part of the CPEC.