The Islamic Republic of Iran Shipping Line Group says it has invested $10 million in Solyanka Port of Russia’s Astrakhan.
Part of this investment, which has been funded through Russian banking loans, was spent on purchasing a vessel with a capacity of 270 containers. The wharfs and inner roads of the port have also been overhauled, ILNA reported.
Solyanka Port throughput, prior to IRISL Group’s investment, stood at 50,000 tons per month, which figure is estimated to rise by 70% and reach 85,000 tons per month after the investments come to fruition.
The port registered 470,000 tons in throughput during the first nine months of 2022, indicating a 30% increase compared with the similar period of last year.
Solyanka accounts for around 20% of Astrakhan Port’s total throughput. It spreads across 150,000 square meters, has five wharfs and 11,600 roofed warehouses.
IRISL is the biggest player in Iran’s transportation sector.
Multimodal Transportation Rises Among Russia, Iran and India
Dariush Jamali, the head of the Iranian-Russian Port of Solyanka, announced in mid-2022 that the first transit shipment from Russia to India had been sent through Iran by way of the International North-South Transportation Corridor. This shipment passed on a multimodal route through Astrakhan Port, specifically the Solyanka Port (Russia); Bandar Abbas and Chabahar ports (Iran); and Nhava Sheva Port (India).
“The consignments are two 40-feet containers of wood laminates weighing a total of 41 tons. The containers were loaded at St. Petersburg and are heading toward Astakhan where they will be loaded again at Solyanka Port. They will then traverse the Caspian Sea to reach Iran’s Anzali Port where they are scheduled to be transported to Bandar Abbas Port city in the south via trucks. The two containers will then be dispatched to Jawaharlal Nehru, India’s largest container port,” Jamali said in June.
As Vali Kaleji, an expert on Central Asia and Caucasian Studies, wrote for Eurasia Daily Monitor, a publication of the Jamestown Foundation, the Solyanka section’s role is critical, which was classified as the first among 15 ports on the Volga River and in the Republic of Dagestan in 2020.
Since a decade ago, the Islamic Republic of Iran Shipping Lines has bought 53% of Solyanka Port’s shares in Astrakhan. Solyanka is important because the main part of Iranian sea trade is in Caspian Sea with the Port of Astrakhan, a smaller portion of this trade is also dedicated to Makhachkala Port.
Iran’s focus on Astrakhan Port is not new and, in the past decade, has not been limited to the purchase of 53% of Solyanka’s shares. The country has a consulate and a branch of Mir Business Bank in Astrakhan which, along with the Moscow and Kazan branches, is crucial for facilitating banking and financial transfers between Iran and Russia.
Likewise, Iran Trade Center was inaugurated in Astrakhan on Oct. 25, 2017. This 200-year-old center had been closed after the Russian Revolution of 1917. Additionally, in recent years, various Iranian companies have invested in the Lotus Special Economic Zone in Astrakhan.
Iran-Russia Routes
Given the conditions of the Ukraine war, Astrakhan Port and Solyanka have become two of the most important transit links between Iran and Russia.
This route should be considered in the context of INSTC, which has three routes running from Russia to Iran, through Central Asia, the Caspian Sea and the South Caucasus. Since restrictions have been placed on passages from Russia to Europe in response to the war, Moscow’s attention to all three transit routes has increased significantly.
In Central Asia, the road and rail routes connect Russia to Iran through Kazakhstan and Turkmenistan. In South Caucasus, due to the severance of relations between Russia and Georgia, the road route from Russia to Azerbaijan through the Baku-Astara highway is the most consequential passage from Russia to Iran. Although the linked rail networks of Russia and Azerbaijan still lack a physical connection with Iran, the only remaining gap is a 164-kilometer railroad section from Rasht to Astara. Until this segment is finished, freight moving by train must be transferred to trucks and then back again.
Due to Russia’s strong need for the north-south corridor, new agreements have been made between Iran and Russia to complete the Rasht-Astara section and Tehran has sought to attract Russian investment for the project.
Since no direct rail connection exists between Iran and the Caucasus, the Astara-Baku-Dagestan land route is the main transit route from Iran to Russia, which has experienced increased traffic in recent months. This is an important reason for Iran and Russia to expand the transit capacity of the sea route through the Caspian Sea. In fact, the passage through Astrakhan, Solyanka and Makhachkala ports to Iranian ports makes it possible to re-route portions of the Caucasus traffic through the Caspian Sea.
Among Iran’s several ports on the Caspian Sea, the two ports of Amirabad and Anzali are central to the rapid transfer of containers from Solyanka and Astrakhan to the southern ports of Iran, including Bandar Abbas. In the meantime, Chabahar Port, as Iran’s only port in the Sea of Oman, is critical for communication among India, Iran and Russia within the framework of the north-south corridor.
In this regard, a tripartite agreement was signed by the Lotus SEZ, Anzali Free Zone Organization in the Caspian Sea and Chabahar Free Trade–Industrial Zone in the Sea of Oman. Currently, a 634-kilometer railroad section between Chabahar and Zahedan in southeastern Iran is the only remaining gap that prevents direct rail connections from Chabahar Port to Anzali Port. The Chabahar-Zahedan rail project is expected to be completed by March 2024.
India’s Motives
India’s motives for participating in the INSTC are also important. It is one of the founding members of the project and signed a historic three-country deal to develop the strategic Chabahar Port as a crucial node in a “transit and transport corridor” through Afghanistan on May 24, 2016. Indeed, India has continued to engage with Iran on the Chabahar-Zahedan railroad since a memorandum of understanding was signed between the two countries during Indian Prime Minister Narendra Modi’s visit to Iran in 2016. The completion of this project will give India the possibility to connect to Mashhad and Sarakhs in northeast Iran as well as Central Asia through Chabahar Port and to reach Anzali Port in northern Iran, south of the Caspian Sea.
This multimodal transportation corridor will also provide India with the opportunity to connect Nhava Sheva Port, its second-largest container port, with Chabahar Port in the Sea of Oman, Anzali Port on the Caspian Sea’s southern coast and Astrakhan and Solyanka ports on the northern part of the Caspian Sea that borders Russia.
The main trade route between Russia and India is the sea route through the Suez Canal. Therefore, establishing reliable links in the aforementioned passages would cut India’s time and cost for transporting goods in half.
Ultimately, the war in Ukraine and Russia’s transit restrictions with Europe have caused a great deal of movement in INSTC. Under the circumstances, Moscow is striving to make the most of the combined transportation routes through Central Asia, the Caspian Sea and the Caucasus to develop trade with other economic partners, such as China, Iran, Turkey and India, while reducing the negative consequences of Western sanctions on the Russian economy.
