Iran Set for Rail Revolution With Funding From China, Russia

Iran’s railroad sector is receiving billions of dollars of foreign investments after the lifting of trade embargoes, as the Persian Gulf country looks to electrify its rail network.

Iran’s push for electrification concerns the upgrading of the 575-mile (925-kilometer) main line from Tehran to Mashhad, which project has been on the agenda since 2012.

However, the most recent financial assistance, including from German company Siemens, has materialized after the lifting of 10 years of trade sanctions imposed on the Islamic Republic in 2006 over its nuclear energy program, reads an article published by London-based website SmartRail World. Excepts follow:

China and Russia became two of the first investors to throw their hats into the ring and help Iran realize its ambition of slashing the journey time in half between Tehran and Mashhad to six hours and move a projected 10 million tons of freight a year by 2032.

China unveiled a finance package funded by a consortium of companies, led by China National Machinery Import and Export Corporation, for overhead equipment and rolling stock in June 2014, while Russian Railways began a $1 billion electrification, track and signaling deal in November 2015 for the railroad linking the cities of Garmsar and Gorgan.

Speaking about the Russia deal, which was made official in March 2017, the head of the Islamic Republic of Iran Railways, Yousef Geranpasha, said, “With the agreement of the Russian bank to provide finance, the project will soon enter the implementation phase and become operational within three years.”

Work on the China deal was officially launched by President Hassan Rouhani a month after the lifting of sanctions in February 2016. Following the signing of the $1.5 billion China-Iran deal, which will be bolstered by $200 million of investment from Iran, the country’s Bank of Industry and Mine’s Managing Director Ali Ashraf Afkhami said the agreement had been signed after “16 months of continuous negotiations” with Chinese bank, Export-Import Bank of China.

Work is also underway on another high-speed electrified railroad that links the cities of Tehran, Qom and Isfahan, for which Siemens will provide a number of trains, signaling equipment and communication signs for MAPNA, a group of Iranian companies involved in development and execution of rail.

“Through financing a number of construction projects, Siemens plans to enter into a joint venture with Iran’s MAPNA company both in the power plant and locomotive manufacturing sector to boost domestic production,” said Deputy Minister of Roads and Urban Development for International Affairs Asghar Fakhrieh-Kashan.