UN sanctions pinching, India set to scuttle shipping JV with Iran
With UN sanctions on Tehran crippling operations of the India-Iran shipping joint venture, the government is set to approve on Tuesday the shipping ministry's proposal to wind up the 39-year-old entity.
India has agreed to take over six of the seven vessels, four of them at market value. This followed a government decision to move the UN to "de-sanction" these vessels so they could be deployed elsewhere under the Indian flag.
The decision to dissolve the JV, if taken by the cabinet, would come at a time when India is looking to invest in Iran's Chahbahar port to expand berthing facilities as a way to bypass Pakistan and connect to Afghanistan.
The problem with Iran-o-Hind Shipping Company Ltd, a JV between Shipping Corporation of India and the Islamic Republic of Iran Shipping Lines (IRISL), was that it found itself in the list of sanctioned entities.
This was largely because IRISL was fully brought under sanctions through UN Security Council Resolution 1929 in 2010. Iran-o-Hind's fleet was largely used to transport crude to India.
Making a strong case for terminating the joint venture, the ministry has said that the firm was finding it tough to get customers for the ships; faced problems related to insurance and financial transactions as banks refuse to entertain accounts linked with Iran; and that its vessels found it difficult to get ships operating under other flags to help them on the high seas.
TOUGH to get CUSTOMERS for vessels
PERSISTENT insurance-related issues
BANKS don't entertain Iran-linked accounts
$195 mn, loan liability $ 80 mn
6 ships to be taken over by India