Domestic Economy

Rail Connectivity Comes to the Fore

Rail Connectivity  Comes to the ForeRail Connectivity  Comes to the Fore

Currently, roads account for up to 90% of transit in Iran, which is way above global average. The lower cost and fuel efficiency of rail transport have galvanized Iranian officials into considering a major overhaul of the country's rail system. The country has for long been the center of attention in mega projects like the International North-South Transport Corridor and New Silk Road.

The INSTC and ways of funding it were a hot topic of discussion during a trilateral meeting attended by Iran’s Foreign Minister Mohammad JavadZarif, and his Russian and Azeri counterparts Sergey Lavrov and ElmarMammadyarov respectively in Azerbaijan's capital, Baku, on Thursday.

“The respective ministries of Azerbaijan, Russia and Iran will begin to thoroughly work on the practical aspects of the project's implementation on the Caspian Sea's western coast,” Baku-based Trend News Agency quoted Lavrov as saying in a press conference after the meeting.

He added that the transport ministries of Iran, Azerbaijan and Russia need to review the technical and financial parameters of the project, which also include collaboration in customs and consular services.

Iran, Russia, India and 10 other countries earlier held a meeting in New Delhi, approving transit and customs agreements regarding the project to provide the legal framework for addressing logistical issues and facilitating the smooth movement of freight through the corridor.

The INSTC is a ship, rail and road transportation network for moving freight from India to Europe through Central Asia, Caucasus and Russia. The route primarily involves moving freight from India to Iran by ship, from Iran to Armenia and Georgia by rail and road, and with the same means of transportation from Georgia to Russia and Europe.

The project requires the construction of a rail link between the city of Astara in northwestern Iran and an Azeri city with the same name. Both countries have agreed to construct a rail bridge on Astarachay River on the mutual border.

"The construction of the bridge will start on April 20," Mammadyarov was quoted as saying by IRNA.Tehran and Baku hope to finish the project by the end of 2016.

To complete the Iranian leg of the global route, the country also needs to finish the construction of a rail link connecting the Iranian cities of Rasht and Qazvin. The project was launched a long time ago but was left incomplete due to financial issues.

Lavrov noted that Baku has expressed willingness to invest in the Qazvin-Rasht-Astara railroad construction project on the territory of Iran, which is estimated to require $400 million in investment.

The pathway, when completed, is expected to initially increase the 600,000 tons of commodities currently traded between Iran and Azerbaijan to 5 million and later to 15-20 million tons per year, helping bilateral trade to dramatically increase from the current $500 million per year.



New Silk Road

Iran is working to prepare the infrastructures for another major international rail project aimed at reviving the ancient Silk Road economic pathway between the East and the West.The New Silk Road will link China, Russia, Central Asia, Iran, Turkey and Europe.

Head of the Islamic Republic of Iran Railways, Mohsen PourseyyedAqaei, said earlier Iran and Turkey have agreed on the construction of a new rail link through Bazargan border crossing to replace the inefficient existing rail between the two neighbors.

A majority of exchanges between Iran and Turkey are carried out via roads and Bazargan is the two countries’ busiest border crossing. The project, however, is in the early stages.

“We have not yet started the construction. Topographic operations and early studies are currently in progress,” Aqaei was quoted as saying by ILNA.

The project will not only reduce the role of roads in Iran-Turkey trade but it can also contribute to the New Silk Road transit route, which is estimated to pave the way for a $955 billion trade between China and countries along the way.

The arrival of the first cargo train from China on February 15 marked the revival of the ancient Silk Road. Loaded with commercial goods, the train set off from Yiwu City in China’s Zhejiang Province on January 28. It covered 10,399 km, passing through Kazakhstan and Turkmenistan, to reach the border station of Sarakhs in Iran’s KhorasanRazavi Province, IRNA reported.

“The sea journey would have taken 30 days. The rail route, however, has reduced this to less than 14 days, which proves that the Silk Road is the most efficient way of connecting the two countries,” Aqaei was quoted as saying after the train's arrival.

Iran’s rail transit in the last Iranian year (ended March 19, 2016) amounted to 1.5 million tons. With the revival of the Silk Road, the figure is estimated to reach 4 million tons in the current Iranian year.