Regular Russia-Iran Container Train Services Launched

RZD Logistics has introduced a regular container train between Russia and Iran. The import-export shuttle runs along the International North-South Transportation Corridor in eastern Russia.
The train starts in Chekhov, south of Moscow (Russia), and travels via Kazakhstan first to Sarakhs in Turkmenistan, the International Transport Journal reported.
Here, the containers are reloaded from a 1,520-mm broad gauge to a 1,435-mm standard gauge and then continue by rail to the Iranian port of Bandar Abbas, where they are transferred to ships for onward transport by sea.
On the way back, the train carries imported goods for the Russian Federation. RZDL announced that the regular container train will run initially once a month.
RZD Logistics, one of the leading companies on Russian forwarding services market, was established in 2010 in the line with the logistics business development within Russian Railways Holding. It is said to be the largest multimodal logistics operator in the CIS and Baltic countries.

INSTC’s Missing Link

Russian Railways is expecting a decision soon on completing a section of the Rasht-Astara railroad in Iran, Sergei Pavlov, the first deputy head of the company, said last month during the Made in Russia 2022 international export forum.
"Rasht-Astara is a serious obstacle today for connecting the railroad [North-South ITC] into a single network," Pavlov said, noting that the RZD-Logistics subsidiary currently uses the route for multimodal transportation, Interfax reported.
"We are currently holding very intensive negotiations with the Iranian side and with the Azerbaijani side in order to launch the route. I am certain that we will be able to hear positive news very soon, because all the participants, all the governments and the ministries of transportation and railroad organizations are working toward the single goal of launching the railroad as soon as possible," Pavlov added.
INSTC is a major transit route designed to facilitate the transportation of goods from Mumbai in India to Helsinki in Finland, using Iranian ports and railroads, which the Islamic Republic plans to connect to those of Azerbaijan and Russia. 
The corridor connects Iran with Russia’s Baltic ports and give Russia rail connectivity to both the Persian Gulf and the Indian rail network.
This means goods can be carried from Mumbai to the Iranian port of Bandar Abbas and further to Baku. They could then pass across the Russian border into Astrakhan before proceeding to Moscow and St. Petersburg, before entering Europe.
INSTC would substantially cut the travel time for everything from Asian consumer goods to Central Eurasia’s natural resources to advanced European exports.
Iran and Russia have agreed on details of their plan to transit 10 million tons of goods along the International North South Transit Corridor.

The agreement was made during a meeting of the two side’s transportation officials in Moscow on  June 28 and 29.
“Around 220 trillion rials [$656 million] are needed to complete the construction of Rasht-Astara railroad,” says the CEO of the Construction and Development of Transportation Infrastructures Company, adding that the government is working to provide this sum through local or foreign investment.
“Russia has shown readiness to invest in this project. Expert Russian teams have visited the railroad’s site and we have given them the project’s technical data. They are expected to respond within a month,” Kheirollah Khademi was also quoted as saying by the news portal of the Ministry of Roads and Urban Development, adding that the Iranian side is waiting for the Russian side to announce its preferred mode of financial engagement in the project, which would either be in the form of a government loan, joint investment, or financing.
The 164-km Rasht–Astara railroad has faced years of problems in terms of construction and implementation. The main obstacle has been financing, particularly due to the United States’ sanctions on Iran. 
According to an earlier agreement between Iran and the Republic of Azerbaijan, both sides pledged to provide $500 million each to build the Rasht–Astara railroad. And in 2016, the International Bank of Azerbaijan signed a deal with Iran on the allocation of a $500 million loan for this purpose. However, in practice, this agreement and the loan were never implemented due to the comprehensive US sanctions on Iran’s banking network.
Khademi noted that Rasht-Astara railroad is a key project connecting southeast Asia to eastern Europe and Russia.
“Its completion can bring in enormous revenues by increasing the volume of goods transited through Iran. The route can attract the lion’s share of the cargo transported between Russia and India or East Europe and India,” he said. 
The Astara–Rasht–Qazvin railroad, which will wind along the southwestern corner of the Caspian Sea, forms a central link of the longer INSTC, a multimodal route linking India, Iran, Azerbaijan, Russia and Europe. 
The cross-border Astara (Iran)–Astara (Azerbaijan) section of the railroad was officially inaugurated on March 29, 2018, while the Rasht–Qazvin section inside Iran was implemented on March 6, 2019. Therefore, the only remaining gap is a 164-kilometer railroad section from Rasht to Astara.
Until this railroad segment is completed, freight moving by train must be transferred to trucks and then back again. 
Khademi referred to the passage of Rasht-Astara railroad through farms along 50% of the route as a significant hurdle in completion of the project.
“We need to purchase these farms and after that, construct bridges to preserve Nature. So far, we have designed bridges along 52 kilometers of the way.”

Comparative Advantage

The Iranian government is determined to implement this important railroad project, which compares favorably along various metrics with a handful of other railroad projects in the region, Vali Kaleji, an expert on Central Asia and Caucasian Studies, wrote for the Jamestown Foundations. 
Notably, the Iranian-Armenian railroad from Meghri, Syunik Province, in southern Armenia, suffers from high costs and has not seen any progress since 2009. Whereas plans to restore Soviet-era east-west railroad corridors in the South Caucasus following the Second Karabakh War (Sep. 27–Nov. 10, 2020) have stalled due to differences between Armenia and Azerbaijan over the interpretation of the ninth clause of their ceasefire agreement, brokered by Moscow. The construction and completion of the Rasht–Astara railroad is, therefore, the only practical and accessible short-term prospect for Iran to connect to the South Caucasus. Its implementation will complete the last remaining section of the INSTC and create a physical rail link for the Republic of Azerbaijan, Georgia and Russia to Iran’s Chabahar Port on the Oman Sea and Bandar Abbas on the Persian Gulf.
Another important issue for Iran is expanding its freight corridors to the Moscow-led Eurasian Economic Union in order to take fuller advantage of the EEU-Iran Preferential Trade Agreement. In this regard, Iranian President Ebrahim Raisi last year said, during a tour of Gilan Province (where the two cities of Rasht and Astara are located), that railroad and other transit infrastructure projects, along with the purchase of roll-on/roll-off vessels, should be accelerated to boost intra-regional trade.
In this situation, Iran desperately needs to complete the Rasht–Astara railroad. But since the Republic of Azerbaijan has been unable to fulfill its financial obligations due to sanctions, Tehran is turning to Moscow for support.