INSTC Countries Meet in Tehran to Survey Mega Project's Progress

EghtesadOnline: The Seventh International North-South Transport Corridor's Coordination Council Meeting and the eighth meeting of Expert Groups convened in Tehran on Monday.

News ID: ۷۴۶۸۴۳

05 March 2019

High-ranking officials from Iran and 12 other countries, namely India, Russia, Turkey, Tajikistan, Armenia, Azerbaijan, Belarus, Bulgaria, Oman, Kyrgyzstan, Kazakhstan and Syria, gathered for the events, which is set to conclude on March 5.

The meetings were aimed at exploring ways of facilitating transportation of freight and passengers through the international corridor, as well as following up on earlier agreements made between the above-mentioned states, all of which are located along the route.

Inauguration of Qazvin-Rasht Railroad on Wednesday

Iran’s Minister of Roads and Urban Development Mohammad Eslami spoke to the press on the sidelines of the meetings, Financial Tribune reported.

Referring to the upcoming inauguration of the Qazvin-Rasht Railroad, the minister said, “This rail route, which was one of the main INSTC missing links in the Iranian territory, will come on stream on Wednesday in the presence of President Hassan Rouhani.”

Eslami also said that a contractor has been selected for the Rasht-Astara rail route, another missing link in the INSTC corridor.

“We will soon hold a ground-breaking ceremony to mark the beginning of Rasht-Astara Railroad construction project. The ceremony is also to be attended by President Rouhani,” he said.

Noting that the previous INSTC Coordination Council meeting was held in New Delhi in 2015, Shahram Adamnejad, deputy minister of roads and urban development in transportation affairs, said this session is expected to inject new blood into the mega project.

“Here, we are going to explore ways to accelerate and facilitate cooperation and reduce transportation costs via INSTC. One thing we are after is to see how we could change the riders or add new ones to the agreements already made so as to maintain INSTC’s competitive edge at a time when other corridors are trying to gain a foothold in regional transportation,” he told Financial Tribune.

Adamnejad noted that all countries along the INSTC have sped up work on infrastructural projects, particularly in the rail sector.

“Iran is using all its capacities to complete the Iranian share of the corridor. The missing links are being gradually filled in and the inauguration of Qazvin-Rasht Railroad is proof that Iran is fulfilling its own share of the project," he said.

He added that Tehran and Baku are planning to sign a contract for financing Rasht-Astara Railroad soon.

The Azeri representative refused to comment in this respect.

India Working on Chabahar-Zahedan Railroad

Devish Uttam, deputy chief of mission with the Embassy of India in Tehran, told Financial Tribune that India is working on a rail project from Iran's strategic Chabahar Port to the city of Zahedan on the border with Afghanistan.

“The connectivity of Chabahar Port with the hinterland is very important. So there is a contract between an Indian railroad company, IRCON, with the Construction and Development of Transportation Infrastructure Company of Iran. They are working out how to build this railroad,” he said.

The Indian operator of Chabahar, India Global Ports Limited, is planning to invest $500 million over the next 10 years in the port.

Chabahar, a hotspot along the INSTC, is Iran's only oceanic port.

IGPL plans to equip Chabahar with special loading and unloading harbor machinery.

Chabahar Port is being considered as a gateway to golden opportunities for trade by India, Iran and Afghanistan with Central Asian countries, besides ramping up trade among the three countries in the wake of Pakistan denying transit access to New Delhi.

The United States has excluded the development of Chabahar from its “maximum-pressure” sanctions reimposed against Tehran on Nov. 5, 2018.

Upper Hand in Regional Transportation

INSTC is a major transit route designed to facilitate the transportation of goods from Mumbai in India to Helsinki in Finland, using Iranian ports and railroads, which the Islamic Republic plans to connect to those of Azerbaijan and Russia.

The corridor will connect Iran with Russia’s Baltic ports and give Russia rail connectivity to both the Persian Gulf and the Indian rail network.

This means goods could be carried from Mumbai to the Iranian port of Bandar Abbas and further to Baku. They could then pass across the Russian border into Astrakhan before proceeding to Moscow and St. Petersburg, before entering Europe.

INSTC would substantially cut the travel time for everything from Asian consumer goods to Central Eurasia’s natural resources to advanced European exports.

The multimodal route is estimated to reduce the time and cost of transportation of goods between India and Europe from 40 to 15 days. The corridor is said to have the potential of diverting up to 10 million tons of India-Europe trade to the route.

Currently, 72 million tons of goods are shipped from India to Europe and 25 billion tons are transported in the opposite direction every year.

When completed, INSTC is expected to increase the volume of commodities currently traded between Iran and Azerbaijan from 600,000 tons to 5 million tons per year, dramatically increasing bilateral trade from the current $500 million per year.