“Geopolitical fears can be overcome by demonstrating benefits” – Kommersant

About what are the needs of Iran in goods that can flow through the international transport corridor (ITC) North-South, as well as in railway infrastructure and equipment, “Kommersant” was told by a researcher at the Center for Middle East and African Studies of the Institute of International Studies of MGIMO of the Russian Foreign Ministry Adlan Margoev.

— Russia’s interest in the ITC North-South is understandable. And what is the interest of Iran itself? How promising is this corridor for Iran in terms of its own exports and imports?

– Iran has enough logistics infrastructure to maintain exports and imports at a minimum acceptable level, but it is not enough to ensure the target pace of economic development. In addition, in an attempt to reorient supply chains towards friendly countries, Moscow, after two decades of discussions about the North-South corridor, felt the need to overcome the bottlenecks of this corridor and showed a willingness to develop rail infrastructure in Iran. Iranian authorities voice the opinion that in the future Tehran will be able to earn more from the transit of goods than from the sale of oil: they mean transit not only along the North-South corridor, but also through the Belt and Road.

– As part of the legal agreement on financing the Rasht-Astara section, the parties agreed to build it in the future on the Russian gauge, and there are calls to build the Russian gauge all the way to Bandar Abbas. To what extent is Iran, including geopolitically, interested in the appearance of a Russian standard railway on its territory?

— The Iranian political establishment is not monolithic in its attitude towards Russia, however, at this stage, power in Tehran is concentrated in the hands of those who show empathy for Moscow and are determined to fight sanctions pressure together with it. This state of affairs does not exclude that the internal political pendulum in Iran will swing in the opposite direction, but even in this case, potential geopolitical concerns can be overcome by demonstrating benefits.

When the previous government in Iran concluded a 25-year cooperation plan with China without making its text public due to sanctions risks, the government was criticized in the Iranian press and blogosphere: they would give the entire country to the Beijing concession. The reality turned out to be not so terrible, but China retains the role of Iran’s main trading partner.

The task for Russia in this context is to reinforce the long-term positive attitude in Iran towards bilateral cooperation, but to create realistic expectations about the pace at which the contribution to the infrastructure of such cooperation can bring results. My feeling is that we will need three to seven years of hard, coordinated work to see a multiple increase in Russian-Iranian economic cooperation.

— Judging by the mood of the Iranian delegates at the conferences on the ITC North-South, Iran’s interests are now primarily in the port of Chekhbahar and the railway infrastructure adjacent to it, and not the development of communication with the port of Bandar Abbas. Is this impression correct?

– Shaheed Beheshti port in Chehbahar is the first deep-water port in Iran, which provides greater throughput compared to the port of Shahid Bahonar in Bandar Abbas. However, unlike the latter, its problem is that the nearest logistics hub requires 628 km of railway, of which only 157 km are laid – between the cities of Zahedan and Khash. It is unlikely that the Iranian side will meet the next postponed launch date for the entire branch – September 2024.

Therefore, Russia is focused on another section – 163 km of the missing railway between the cities of Rasht and Astara, which will close the western branch of the North-South corridor and will connect St. Petersburg with Bandar Abbas. There are no political contradictions between the projects, but the conditions require Moscow to prioritize: first finish building what will give results first.

— What Russian cargoes would be interesting for Iran and what can it offer Russia?

– Unfortunately, more than 70% of the Russian-Iranian trade is agricultural products, and in both directions: Russia supplies grain and sunflower oil, Iran supplies fruits, vegetables, nuts and seafood. Diversification of mutual trade is one of the priority tasks that the authorities and business circles of the two countries are solving under the auspices of the intergovernmental commission by organizing business missions, exhibitions and forums.

— To what extent is Iran able to provide the ITC North-South with its own railway equipment with an increase in freight traffic?

— Rail logistics in Iran is underdeveloped, largely due to the fact that trucking is more comprehensive and cheaper. Unlike railways, automobile roads are laid in all cities, so there is no need to reload from one type of transport to another, and gasoline is subsidized by the state: the first 60 liters of 95th gasoline per month can be purchased at a price of 2.5 rubles per liter, the next – at 5 rubles.

The average age of the Iranian rolling stock is 24 years, some samples have been in operation for more than 50 years. Back in 2019, Iranian officials said that, given the development of rail transport, Iran would need 30,000 freight cars and 650 locomotives by 2023 (according to some estimates, Iran had 24,000 freight cars and 100 locomotives at that time). National capacities do not allow Iran to achieve such results alone – interest in joint projects with Russia in this area will grow.

Interviewed by Natalya Skorlygina