Iran and Russia have reached an agreement for the construction of the Rasht-Astara railroad project.
Iran’s Deputy Transport and Urban Development Minister for Transportation Affairs Shahriar Afandizadeh was quoted as saying by Mehr News Agency on Wednesday that the Rasht-Astara railroad is “the most important project” of the country.
He noted that the project completes the 162-km North-South corridor from Bandar Abbas to Rasht and from Rasht to Astara, and connects Iran to Russia and Northern Europe through the Azerbaijan Republic.
Referring to the Russian government’s desire for the completion of the Rasht-Astara railroad in the form of a loan or other financial methods, Afandizadeh said that in recent months, negotiations have been held with the Russian government in order to develop transit between the two countries.
Referring to a tripartite memorandum among Iran, Russia and Azerbaijan, he said the construction and operation of the railroad project are foreseen in 16 articles, which determine the type of line design, including the width of railroads of this project.
With the investment of Russians, the rail project is supposed to be completed within three years.
According to the agreement, Iranian contractors will fully implement the infrastructure of the railroad.
Iran will build a railroad from Rasht on the Caspian Sea to Astara in Azerbaijan, some 180 km to the north near the Iranian border, where it would connect with the Azeri rail system, Global Construction Review wrote.
If it goes ahead, the scheme could revive a two-decade-old idea of establishing a rail-and-sea trade route from India to Russia, billed as the International North–South Transportation Corridor.
First discussed by the parties in 2000, such a route would cut the time it takes freight to get from India to Russia from six weeks by sea only to three by a more direct land-and-sea route.
The project 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.
Connecting Southeast Asia to Eastern Europe, Russia
Rasht-Astara railroad is a key project connecting southeast Asia to eastern Europe and Russia, according to Kheirollah Khademi, the CEO of the Construction and Development of Transportation Infrastructures Company.
“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 obstacle to the project.
“We need to purchase these farms and after that, construct bridges to preserve the nature. So far, we have designed bridges along 52 kilometers of the way,” he said.
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. Excerpts of the write-up follow:
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 rail corridors in the South Caucasus following the Second Karabakh War (Sept. 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 are, therefore, the only practical and accessible short-term prospect for Iran to connect to South Caucasus. Its implementation will complete the last remaining section of 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/lift-off vessels, should be accelerated to boost intra-regional trade.
In fact, 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.
