India is very much "in game" when it comes to the Chabahar-Zahedan rail project in Iran and there has been no dilution in the commitment on both the countries to jointly developing the connectivity project, sources in the Indian government said on Wednesday.
"Both sides remain committed to Chabahar-Zahedan railway project," sources said, adding that "we are very much in the game but progress is slow due to current political environment."
Indian government sources also refuted reports that New Delhi has been removed from the project.
India sees the various connectivity projects in the west Asian country as the "paradigm driving India-Iran relations". The Chabahar-Zahedan port, the rail project and the International North-South Corridor (INSTC) from Mumbai to Moscow that passes via Chabahar are key connectivity projects both India and Iran are working on.
"This is therefore not merely an India-Iran initiative but one which generates considerable interest from Central Asian Republics and the Republic of Azerbaijan," sources said.
According to reports, Iran Railways earlier this month started laying track for the 628 km railway project with the full length of the track expected to be completed by March 2022.
There are two components of the massive connectivity project, first being the substructure, the concrete bed on which rail tracks are mounted. Under the bilateral agreement, Iran is to lay the substructure which has seen delays due to lack of funds. Upon completion of substructure, India will supply the stock and the operationalisation is to be done jointly.
Another issue has been that Iran was procuring steel from Indian suppliers. This has been suspended due to US sanctions. Iran Presidential elections next summer and domestic politics are also in play in the country and sources believe it does impact the project.
During Prime Minister Narendra Modi's 2016 visit to the West Asian country, India and Iran signed an MoU on the construction of Chabahar-Zahedan railway line which forms part of transit and transportation corridor in a trilateral agreement between India, Iran and Afghanistan. The MoU was signed between India's IRCON and Construction, Development of Transport and Infrastructure Company (CDTIC) of Iran.
On the issue of financing, broad terms have been agreed upon and these are approximately in the range of $800 mn.
