Economy, Business And Markets

Azerbaijan to Follow Through on Joint Railroad Project

Azerbaijan to Follow Through on Joint Railroad Project
Azerbaijan to Follow Through on Joint Railroad Project

Azerbaijan’s Economy Minister Shahin Mustafayev was due to arrive in Iran on Wednesday, Iranian Ambassador to Azerbaijan Mohsen Pakayeen said.

The ambassador said Mahmoud Vaezi, minister of communications and information technology of Iran and co-chairman of Iran-Azerbaijan Economic Commission, invited Mustafayev to Qazvin to take stock of the latest development in Qazvin-Rasht-Astara Railroad, Trend News Agency reported.

The railroad is the missing link in a new international transit route the two countries are devising to facilitate trade and transportation.

“The new corridor from the Persian Gulf port of Bandar Abbas to Europe will shorten the current 45-day transit time to 22-23 days,” Hossein Ashouri, deputy head of Islamic Republic of Iran Railroads, has been quoted as saying by Mehr News Agency.

The multimodal international transit pathway proposed by Iran, Azerbaijan and Georgia is to replace the current route passing through Turkey.

Along with those three countries, Bulgaria, Italy and Greece also have begun to engage in talks centered around the new corridor.

Ashouri said European products could be transported to Iran through the important corridor in the west of Caspian Sea, using rail, sea and road.

“Commodities will be transported by rail to Black Sea and then shipped to the ports of Batumi and Poti in Georgia, from which point they will be transported to Azerbaijan and Iran,” he said.

The route will be used to transport commodities from India to Europe as well.

Ashouri said shipments arrived in Bandar Abbas from Mumbai by sea will be transported via railroad to Qazvin, whereby they will be loaded on trucks to be transported to the city of Astara on the Azeri border, due to lack of rail infrastructures between Qazvin and Astara.

The Qazvin-Astara route consists of two railroads of Qazvin-Rasht and Rasht-Astara, whose construction Iran started years ago but was abandoned due to financial problems.

According to Vaezi, Iran has completed the Qazvin-Rasht section by 92% and the remaining rails are expected to be laid in the near future and become operational by late 2016.

“Azerbaijan has agreed to open a $500 million credit line to finance the Rasht-Astara leg of the railroad project,” Vaezi said.

Iran and Azerbaijan lately inaugurated a rail project connecting the two countries’ rail networks—the so-called Astara-Astara plan, which connects the Iranian city of Astara to an Azeri city with the same name.

Construction of a strategic rail bridge on the river of Astaracay along the border, which is an important part of the rail link, also started in April.

According to Ashouri, the construction of two rail routes of Qazvin-Rasht and Rasht-Astara is also a top priority for the government to help ease shipments using the new combined corridor.

The proposed pathway overlaps with a global mega project called International North-South Transport Corridor that aims to connect India, Iran, Russia, Central Asia and Europe.

According to Mustafayev, the route, 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 10 million tons per year.

Iran-Azerbaijan trade in the first quarter of 2016 increased 53% compared with the similar period of a year before to stand at $41.4, according to the State Customs Committee of the Republic of Azerbaijan.