We can complete work on first phase of Chabahar project in 2018: Gadkari

India is keen on expediting development of Chabahar Port in Iran and hopes to complete the first phase of the project next year, Union Minister Nitin Gadkari has said.

Located in the Sistan-Balochistan province on the energy- rich Persian Gulf nation's southern coast, the port is easily accessed from India's western coast, bypassing Pakistan.

"We can complete the work on the first phase of the project in 2018... The funds are likely to be released shortly," Shipping, Road Transport and Highways Minister Gadkari said.

"Tenders are out for the project," the minister said.

Kandla Port has floated tenders inviting global bids for supply and commissioning of terminal tractor trailers, forklifts, reach stackers, empty container handlers and yard cranes among other equipment at Shahid Beheshti Port, Chabahar, Iran.

The Cabinet has already approved funds for development of the project.

For greater trade and investment flow with Iran and neighbouring countries, the Cabinet last year had cleared proposals for development of Chabahar port including through a $150 million credit from Exim Bank.

It also authorised the Shipping Ministry to form a company in Iran for implementing the Chabahar Port Development Project and related activities.

As per the MoU signed between the two nations in May last year, India is to equip and operate two berths in Chabahar Port Phase-I with capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a ten year lease.

Ownership of equipment will be transferred to Iranian side on completion of 10-year period or for an extended period, based on mutual agreement. The Iranian side had requested for provision of a credit of $150 million in accordance with the MoU.

As per the per the pact, operation of two berths is to commence within a period of maximum 18 months after the signing of the contract.

Besides the bilateral pact to develop the Chabahar port, for which India will invest $500 million, a trilateral Agreement on Transport and Transit Corridor has also been signed by India, Afghanistan and Iran.