India's strategic rail projects with Japan, Iran in trouble

Bullet train plan faces cost overrun, Tehran frets over funding

India's strategic rail projects with Japan, Iran in trouble

Two rail projects that are statements of diplomatic significance are in trouble and would need intervention by Prime Minister Narendra Modi, said sources.

Sandeep Dikshit

Tribune News Service

New Delhi, July 14

Two rail projects that are statements of diplomatic significance are in trouble and would need intervention by Prime Minister Narendra Modi, said sources.

The project in partnership with Japan to run the subcontinent's first bullet train is facing a cost overrun, while there is Indian apathy over funding a rail line in Iran, it is reported. The latter's significance is that it will be Afghanistan's first route to the Indian Ocean independent of Pakistan.

The bullet train project has been impacted by cost overruns, especially during the first two lockdowns when Japan kept asking for relaxation in the movement of its engineers and material. The cost overrun is understood to be over $2 billion (Rs 15,000 crore), which is beyond the realm of executives from both sides to resolve.

"The project faces the danger of sliding into a time overrun if the issue is not considered on a priority basis," said sources. There is also the issue of delay in issuing tenders worth Rs 50,000 crore for the project after India announced the "Atmanirbhar Bharat" initiative to source more from local companies. That has necessitated reworking of calculations.

The other rail project, in Iran, has seen Tehran fretting that New Delhi is yet to play a bigger role in funding and constructing a strategic transit route from Chabahar to Zahedan in Afghanistan, and from there to Sarakhs at the border with Turkmenistan.

Sources said as far as the Chabahar port was concerned, Iran would always partner with India. In fact, even during the Covid pandemic, humanitarian assistance from India to Afghanistan transited via the Chabahar port, which is operated by an Indian public sector company.

As is the case with Frazad-B gas field, which has been offered by Iran to India, Tehran has started expressing its impatience with Indian procrastination in investing in the railway line, a vital link in the International North-South Transit Corridor, which significantly shortens the trade routes between India and European and CIS markets.

Diplomatic sources said Tehran had indicated to India that it did not want to depend solely on Beijing for the co-development of transportation routes. "Iran is determined to expand its relations with all Asian partners, China and India in particular, as two friendly countries. Such agreement is fully in line with Iran's publicly declared Look East Policy," said a diplomatic source.

2016 Chabahar port agreement

Iranian President Hassan Rouhani

  • Prime Minister Narendra Modi met Iranian President Hassan Rouhani in May 2016 during which India and Iran signed a deal on development of the Chabahar port
  • Tehran is fretting that New Delhi is yet to play a bigger role in funding and constructing a strategic transit route from Chabahar to Zahedan in Afghanistan, and from there to Sarakhs at the border with Turkmenistan.

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