Economy, Domestic Economy

ESCO to Produce 40KT of Rail by Yearend

ESCO to Produce 40KT of Rail by YearendESCO to Produce 40KT of Rail by Yearend

Esfahan Steel Company has agreed to deliver 40,000 tons of rail to the Islamic Republic of Iran Railways by the end of the current Iranian year (March 2017), says IRIR’s deputy head, Saeed Mohammadzadeh.

ESCO official, Mohammad Reza Kajbaf, said on Wednesday that the company will start production by June 21.  “With a production capacity of 400,000 tons per year, ESCO is capable of meeting domestic demand for 150,000 tons of rail,” he said.

Ministry of Industries, Mining and Trade; ECSO and Ministry of Roads and Urban Development teamed up two years ago in the “National Rail Project” for reducing reliance on rail imports.

The project, however, was delayed due to recession in the domestic steel market, ESCO’s lack of liquidity and IRIR’s refusal to pre-purchase the rails.

The sixth five-year development plan (2016-21) specifically highlights the importance of developing rail transportation in the country.

According to Mohammadzadeh, Iran needs an average of 300,000-400,000 tons of rail per year to meet the needs of its growing economy.

The 20-Year National Vision Plan (2005-25) stipulates that the number of passengers using rail transport be increased from the current 25 million to 65 million per year.

The official also announced that the construction of an electric railroad connecting Tehran to the city of Mashhad is scheduled to be completed in four years.

IRIR has recently signed several memoranda of understanding with the German conglomerate Siemens’ transportation subsidiary, Siemens Mobility, to develop the railroad. As per the agreements, Siemens will be in charge of electrification of Tehran-Mashhad railroad, equipping the route with signaling systems, provision of locomotives and full maintenance services.

Mohammadzadeh said IRIR is currently negotiating ways of financing the €2-billion project.

The overhaul is expected to cut the journey between Tehran and Mashhad from about 12 hours to six, and increase freight capacity to 10 million tons a year.

This route is part of China’s New Silk Road that runs from Urumqi in western China, through Kazakhstan, Uzbekistan and Turkmenistan before crossing south into Iran.