The government is hopeful that the strategic Chabahar Port will be operational by 2018, Union minister Nitin Gadkari has said.
The Road, Transport, Highways and Shipping Minister Gadkari is in Tehran on Friday to represent India at the oath taking ceremony of President Hassan Rouhani.
Prime Minister Narendra Modi had earlier congratulated Rouhani on his re-election as the President of Iran and affirmed India's commitment to strengthen the special relations between the countries.
"India and Iran have been historically sharing special ties... We are keen on developing Chabahar Port and are hopeful of starting operations in 12 to 18 months," Gadkari said.
Gadkari is keen on expediting development of the Chabahar port, located in the Sistan-Baluchistan province on the energy-rich Persian Gulf nation's southern coast that can be easily accessed from India's west coast, bypassing Pakistan.
The visit assumes significance as India has accelerated work at the Chabahar port and finalised some tenders for installation of key equipment at Chabahar Port.
"Civil construction work has started there. We have finalised tenders worth Rs 380 crore for equipment out of Rs 600 crore and once the port becomes operational it will become a growth engine," the minister has said.
The minister has said that he was also hopeful of certain approvals from the Iranian government for expediting work and added that once Chabahar becomes operational the trade and business between both the nations would see a boost.
For greater trade and investment flow with Iran and neighbouring countries, the Cabinet last year cleared proposals for the 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 10-year lease.
Ownership of equipment will be transferred to Iranian side on completion of 10 years 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 pact, operations of two berths are 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.
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