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Iran's Chabahar port eclipses Pakistan in race for Afghan profits

Jyoti Malhotra  |  New Delhi 

Shahbaz Yazdani, the portly CEO of the Chabahar port authority in Iran, is really upset that Commerce Minister Anand Sharma’s impending arrival at the CII-organised investment summit on Afghanistan in the capital last week to deliver the valedictory address means that he doesn’t get any time to make his presentation.

Yazdani has travelled all the way from Chabahar to Delhi and he’s extremely keen to tell the gathering that Iran is open for business. There is a message to the Americans somewhere that Iran is thumbing its nose at them and their precious sanctions, but interestingly, it’s not the most important thing this afternoon. Yazdani is here to talk up the importance of Chabahar and how it could become the perfect alternative route to Afghanistan.

“Right now we can receive ships of 50,000 tonnes capacity. By 2013 we will be able to ramp up to ships with 100,000 tonnes. We are also working on a railway network that will connect Chabahar with Zahedan (a key town on the Iran-Afghanistan border), while a 600-km road is under construction. The Chabahar free-trade zone has been set up on 50 hectares of land. We are ready for India, to do business bilaterally, as well as to use Chabahar as a transit point for Indian goods to be sent to Afghanistan,” Yazdani told this reporter.

As the US and the community begin to draw down troops from Afghanistan in 2014, the rest of the region is looking at ways to get in. Since nature abhors a political and economic vacuum, early bird cliches seem to be ruling the roost. China was the first to get a stepping-stone into Afghanistan, when the China Metallurgical Group Corp and its top integrated copper producer Jiangxi Copper began work in 2009 in the Logar province just south of Kabul, to explore and develop the vast Aynak copper mines. At $4 billion, it was Afghanistan’s biggest foreign investment. (China has recently won the right to develop an oil farm in the Amu Darya basin in northern Afghanistan.)

A Steel Authority of India-led consortium recently won the bid for the 1.8-million tonne Hajigak iron ore mine in Bamiyan province, about 130 km from Kabul (three out of four blocks). The consortium, which includes private players such as JSW Steel, is expected to spend nearly $11 billion to build a power plant, a steel plant and a road and rail link.

In fact, India is already in serious talks with the Iranian government to help build the 900-km road from Chabahar to Zahedan on the Afghan border. The idea is to connect to the Hajigak mines in one smooth swoop. Inside Afghanistan, the road from Zaranj to Delaram, which connects to the ring road around Kabul, has already been built by India.

With the 2014 drawdown becoming the moment the region is waiting for, and Afghanistan-Pakistan relations deteriorating by the hour, the Afghan leadership is looking at other regional partners for support. The CII-led investment summit last week was almost completely underwritten by the Indian government, but it is a measure of Afghanistan’s huge interest that five ministers travelled to Delhi to address it. On July 8, Tokyo will host a development summit focussed on Afghanistan — and the world will move there. In early May, Iran and Afghanistan signed an agreement for the use of Chabahar.

Will India’s private investors rise to the occasion?

So far, almost all Indian investment in Afghanistan is PSU-led, on whose coat-tails private companies are riding. At the summit, all the players focussed on the lack of security inside Afghanistan, but as minister after Afghan minister pointed out, huge profits almost always follows risk.

Few understand the strategic damage Pakistan is causing itself by refusing to allow Nato to use its territory to carry supplies to Afghanistan better than its newest foreign secretary, Jalil Abbas Jilani.

Jilani is coming to Delhi early next week for talks with his Indian counterpart, Ranjan Mathai. Both will surely talk terrorism — Abu Jundal, etc — as well as trade, Siachen and Sir Creek.

But if Pakistan were to think boldly and throw open its territory for trade, it could earn a few billion rupees every year simply by imposing a transit fee on all the trucks that crossed overland.

By refusing to look at its economic self-interest, Pakistan is helping bring Iran into the cynosure of the world’s eyes. No wonder Shahbaz Yazdani, CEO of Chabahar, is beginning to smile again.Few understand the strategic damage Pakistan is causing itself by refusing to allow NATO to use its territory to carry supplies to Afghanistan better than its newest foreign secretary Jalil Abbas Jilani. Now Jilani is coming to Delhi early next week for talks with his Indian counterpart, Ranjan Mathai. Both will surely talk terrorism — Abu Jundal, etc — as well as trade, Siachen and Sir Creek.

But if Pakistan were to think boldly and throw open its territory for trade, it could earn a few billion rupees every year simply by imposing a transit fee on all the trucks that crossed overland.

By refusing to look at its economic self-interest, Pakistan is helping bring Iran into the cynosure of the world’s eyes. No wonder Shahbaz Yazdani, CEO of Chabahar, is beginning to smile again.

First Published: Mon, July 02 2012. 00:20 IST
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