Economy, Domestic Economy

Rail Projects Require $25b in FDI

Rail Projects Require $25b in FDI Rail Projects Require $25b in FDI

Rail projects worth $25 billion have been offered to foreign investors, says the head of Iran Railway Company, Mohsen Pourseyyed Aqaei.

“Rasht-Astara railroad is the government’s top priority project that will be accomplished through FDIs,” IRNA quoted Aqaei as saying on the sidelines of the 5th Exhibition of Roads and Urban Development and Associated Industries in Tehran on Wednesday.

The construction of the “strategic route” which, according to the official, needs an investment of $500 million was discussed with Azerbaijan Republic in a meeting between Iran’s Minister of Communications and Information Technology Mahmoud Vaezi and Azerbaijan’s Minister of Economy and Industry Shahin Mustafayev in Iran on October 9.

The route is the extension of the so-called Astara-Astara railroad–after two cities with the same name across Iran-Azerbaijan border–which is to connect Iran’s rail network to Azerbaijan’s.

During the meeting, Tehran and Baku signed a contract on completing the project by the end of the next Iranian year (March 20, 2017).

The railroads, when completed, will increase the 600,000 tons of commodities currently traded between Iran and Azerbaijan to 5 million tons per year, helping bilateral trade to dramatically increase from the current $500 million per year.

These projects are in fact the missing links in the International North-South Transport Corridor, which is to connect Central Asia to Northern Europe.

“Upon the completion of the project (INSTC), 10 million tons of cargo is estimated to be shipped via the transit line every year,” Aqaei said.

The government’s next priority in terms of railroads, he added, is the Tehran-Mashhad electric train project.

Back in July, Aqaei said the Central Bank of Iran is in talks with China to attract $2 billion for the project, which is currently in the research phase.

The Silk Road Railroad, which will connect Iran, Turkmenistan and Kazakhstan with the aim of increasing freight transport capacity to 10 million tons from the current 3 million tons, and a 410-kilometer high-speed railroad from Tehran to Isfahan, is among mega-projects that the government seeks to finance through FDI.