Economy, Business And Markets

North-South Corridor to Become Operational by March 2018

The INSTC project will facilitate the transportation of goods from Mumbai in India to Helsinki in Finland, using Iranian ports and railroads
North-South Corridor to Become Operational by March 2018
North-South Corridor to Become Operational by March 2018

The rail route between the two Iranian cities of Qazvin and Rasht, which is the missing link in the International North-South Transport Corridor, will become operational by the end of the current Iranian year (March 20, 2018), vice president for planning and strategic supervision who also doubles as the head of Planning and Budget Organization said.

“Since our financial resources are limited, we are directing them to the completion of five major rail projects from among many, one of them being the Qazvin-Rasht route. With the completion of this railroad, an important economic route will be activated. I must announce as the head of Planning and Budget Organization that we have no financial shortages in completing these five projects,” Iran Chamber of Commerce, Industries, Mines and Agriculture’s news portal also quoted Mohammad Baqer Nobakht as saying.

The Iranian government has prioritized rail connections between five provincial capitals. The 267-km line between Tehran and Hamedan came on stream in May.

Three other provincial capitals are scheduled to join Iran’s rail network by March 2018, including the so-called Gharb (West) project connecting the city of Arak in the central Markazi Province with Khosravi Border Crossing in the western Kermanshah Province bordering Iraq, Mahabad-Urmia and Mianeh-Bostanabad railroad projects.

Minister of Roads and Urban Development Abbas Akhoundi has noted that the government will operate 1,800 kilometers of railroads by the end of the current Iranian year, of which more than 900 km pertain to double-tracking.

The INSTC project 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 route includes Iran’s biggest rail bridge with a length of 1.43 km on Sefidroud river in the city of Manjil in Gilan Province.

IRIR is currently building a railroad from the Iranian Caspian port city of Astara to the border with Azerbaijan, from where it will be extended to another namesake city in Azerbaijan.

A completed section of the railroad was tested in early May after a train set off on a maiden journey from Azerbaijan’s Astara. The train travelled 8 kilometers to the border from where it entered the Iranian section of the route.

Following a meeting with Iran’s Minister of Economy Masoud Karbasian, who visited Baku in late October, Azerbaijan’s Minister of Economic Development Shahin Mustafayev said Azerbaijan will run the first pilot train down Astara-Astara railroad in December.



Karbasian also co-chairs the Iran-Azerbaijan Economic Commission.

Azerbaijan has agreed to invest $500 million in the extension of its railroad to Iran.

The Astara-Astara project includes a bridge on Astarachay river stretching along the border, which has already been constructed by Azerbaijan.

Despite the missing rail link from Rasht to Astara, the Islamic Republic will use a multimodal transport system from its southern ports to the north until the incomplete rail connection is added to the route.

The INSTC will connect Iran with Russia’s Baltic ports and give Russia rail connectivity to both the Persian Gulf and the Indian rail network.

This means goods could 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.

The corridor would substantially cut the travel time for everything from Asian consumer goods to Central Eurasia’s natural resources to advanced European exports.

When completed, INSTC is expected to increase the volume of commodities currently traded between Iran and Azerbaijan from 600,000 tons to 5 million tons per year, dramatically increasing bilateral trade from the current $500 million per year.

The rail authorities of Iran, Russia, Belarus and Azerbaijan signed an agreement to expand the capacity of the corridor in a meeting held in Baku last week.

Head of International Transportation Department at the Islamic Republic of Iran Railways Hossein Ashouri said on the sidelines of the meeting that tariffs for freight transportation through INSTC may drop after the completion of Astara-Astara segment.

The sides plan to meet again in the next three months in India to present information about the capabilities of transportation corridor to freight forwarders in India, as the corridor is expected to be extended to Belarus and Northern Europe.

Ashouri noted that Finland, Estonia and Latvia may join INSTC in the near future.

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