India is weighing a rupee-rial payment mechanism for the Chabahar project in Iran as it weaves a way around the impending sanctions imposed by the US on the Persian Gulf nation from 4 November, to kickstart the port that is considered critical to the Country’s geopolitical and trade interests.
“We are trying for a rupee-riyal payment mechanism for Chabahar Port project,” Shipping Secretary Gopal Krishna, IAS, said recently. “Basically, the guarantees will have to be given in rupees now instead of in dollars or euros,” Gopal Krishna added.
The issue was discussed with a high-level delegation led by Mohammad Rastad, Deputy Minister and Managing Director for Ports and Maritime Organization, Islamic Republic of Iran, during its recent visit to India. The plan to set up an alternative payment mechanism reveals that India is willing to go ahead with the project even if the diplomatic lobbying for a waiver from the US on Chabahar Port project fails to yield results.
India’s bid to start commercial operations at the port has been held up due to banking challenges arising from the fresh round of sanctions imposed by the US.
India has picked Bandar Abbas-based Kaveh Port and Marine Services company to run the port as a stop-gap arrangement for 18 months till a full-fledged manage, operate and maintain (MOM) contractor is finalised by India Ports Global Pvt Ltd.
Team to visit Iran
“A rupee-rial payment mechanism is the only way out of this,” said Arun Kumar Gupta, Managing Director, India Ports Global. “That is what we are working on. Instead of dollars or euros, all payments to the Iranian side will be under rupee-rial mechanism,” he said adding that a team from India Ports Global will visit Iran in the next few days to “work out things”.
“Irrespective of the sanctions, we are trying to go ahead with the project; a new payment system will have to be put in place,” he stated.
India Ports Global, a 60:40 joint venture between Jawaharlal Port Trust and Deendayal Port Trust (previously Kandla Port Trust), was set up by the Government to make strategic investments in ports overseas.
Source :- Dailyshippingtimes.com