Iran gets off track – Kommersant

Moscow and Tehran agreed to finance the completion of the missing section of the Rasht-Astara railway in Iran. The Russian Federation will provide a state loan of €1.3 billion for the project out of €1.6 billion of its cost. It is expected that the site will be built in less than four years, while 20 years have passed since the initial agreement on it. Meanwhile, the situation has changed over time. Market participants believe that there is no longer an urgent need for the road: the eastern and trans-Caspian corridors of the North-South ITC are available, which need a cargo base, as well as alternative and easier-to-implement projects. In addition, cargo from the ports of Iran to the border with Azerbaijan can be efficiently transported by road.

The Governments of Russia and Iran with the participation of the Presidents of both countries Vladimir Putin and Ebrahim Raisi signed an agreement on cooperation in financing the design, construction and supply of goods and services for the creation of the Rasht-Astara railway in Iran for the development of transportation along the international transport corridor (ITC) “North-South”.

As Deputy Prime Minister Alexander Novak clarified, the Russian Federation will allocate “an interstate loan of €1.3 billion for this, the total cost of the project is €1.6 billion.” “85% is an interstate loan, repayable, of course, during the payback period of this project,” the official specified. Transportation along the corridor will have significant competitive advantages, Vladimir Putin said: “In particular, the delivery of goods from St. Petersburg, say, to Mumbai will take about ten days,” while “travel time along traditional trade routes is up to 30-45 days “.

Also, within the framework of the ITC there is an eastern route (a land route bypassing the Caspian through the territory of Iran, Turkmenistan and Kazakhstan) and a trans-Caspian corridor with transshipment in the Caspian ports of Iran and Russia. Rail traffic along all these corridors is growing: as Sergey Pavlov, First Deputy General Director of JSC Russian Railways, said, in the first quarter, traffic along the western route doubled year on year, to 2.2 million tons, along the Trans-Caspian – three times, to 74.7 thousand tons, along the eastern route – also doubled, up to 234.8 thousand tons.

In March, Mr. Pavlov said that a decision was made to build the Rasht-Astara section on a combined gauge: it is planned to lay both the 1435 mm gauge (European and adopted in Iran) and the Russian 1520 mm gauge, but the European gauge will be laid first. The Iranian side, he said, estimated the construction period at four years, but they could be reduced. The road will be built by Russia and Iran, he said. Which organization will represent Russia is not specified; Russian Railways did not comment.

According to Mr. Novak, “an agreement has been reached” that after the completion of the section, the total volume of cargo turnover with Iran by rail alone will be at least 15 million tons per year, “this applies only to transit cargo.” He specified that this level of cargo turnover will be reached by 2030.

Negotiations on the completion of the Rasht-Astara section have been going on for more than 20 years. The agreement on the establishment of the North-South ITC was signed in 2000, and the agreement between Iran, Russia and Azerbaijan on the construction of the line, including the Rasht-Astara section, was signed in 2005. In 2018, Azerbaijan provided Iran with a $500 million loan for the construction of the site. But due to Western sanctions against Iran, the money could not be spent. The EDB called the geography of the area one of the key construction problems, as well as the fact that the land on the Caspian coast from Anzali to Astara belongs to private individuals and has a resort value, which increases the cost of its purchase.

The President of Iran stressed that the project of the western branch with a new section is only one of the available options for cooperation with the Russian Federation. “There is another project between Iran, Pakistan and Turkey,” he said. “We must strengthen the railway infrastructure between Iran and Iraq. All efforts are made along this path. Or the way from the port of Chabahar in the Persian Gulf to the Caspian Sea, and then through the territory of the Russian Federation and then along the European route. These are all possible options for cooperation with such a large country as the Russian Federation.”

How wrote to Kommersant on April 19, according to the calculations of Indian companies, a route with road delivery from the port of Chabahar to Astara and then by rail through Azerbaijan to the Russian Federation is already profitable today. In this variant, cargo through Iran goes almost exclusively by road, with the exception of a few kilometers in the Astara region to the border with Azerbaijan.

According to the head of Rusiranexpo Alexander Sharov, the Rasht-Astara section is simply not needed: by the end of the year, a railway corridor through Nakhichevan can be completed, which is capable of providing the existing cargo flow of up to 5-7 million tons per year along the western branch, and it is necessary to lay only about 80 km without tunnels and bridges.

In addition, he notes, now Russian logistics operators also freely carry cargo at a reduced rate along the eastern branch of the North-South ITC and are looking for a cargo base to increase from 5 million to 20 million tons.

At the same time, Mr. Sharov clarifies, Iran is interested in the development of railways. In particular, the country has a state program for subsidizing rail transportation, with proper use of which the car pays off in just two years. And, if Russian operators enter the Iranian market, they will be able to take on about 20-40 million tons of intra-Iranian and export-import rail transportation.

Natalya Skorlygina