Iran: Future Expansion of Passenger Rail Services Cast Into Doubt

EghtesadOnline: By Mohsen Sadeqi’s reckoning, who is in charge of the Economic Evaluation Office at the Ministry of Roads and Urban Development, future investments in railroad development projects in Iran should promote suburban train services and rail freight transport, instead of traditional rail transport of passengers.

News ID: ۷۴۷۸۴۰

13 July 2019

“Rail passenger numbers, except for those pertaining to passengers using suburban train services, have been on a steady decline over the past decade up until last year.

The Iranian railroad network carried 27.96 million passengers last year (March 2018-19).

“Between 2013 and 2017, rail ridership averaged out at 24 million from 28 million-odd in the early 2010s. It was only after last year’s airfare hikes that a number of passengers shifted to railroad transportation services,” he told the Persian daily Donya-e-Eqtesad, according to Financial Tribune.

The official noted that expansion of rail services depends on the level of future rail passenger traffic one wishes to handle.

“Travel time is critical for the competitiveness of different transport modes and this tips the balance for aviation, not only in Iran but also in other countries. In view of this, the share of railroad in transportation does not seem to experience a dramatic growth in years to come unless tracks get upgraded with train speeds of up to 180 kilometers per hour,” he said.

“Knowing this, advanced European and East Asian countries have switched to high-speed rail system as the traditional passenger rail has proved to be economically infeasible at present. However, with improved acceleration, you can still remain cautiously optimistic about the competition between rail and other modes of transportation.”

Noting that convenience, time and costs strongly influence the choice passengers make in relation to which mode of transport to use, Sadeqi said, “These three should be considered together. In fact, there is no justification for a significant rise in train fares despite speeding up train travel. Here you can’t expect passengers to opt for train transport. All in all, a large-scale investment in expansion of traditional rail transportation system does not seem to be a good idea.”

Asked about the Iranian governments’ failure in allocating adequate resources for the development of high-speed rail networks, Sadeqi said he believes such investments depend on economic growth.

“Low gross domestic product growth is a disabler and hampers the import of technology. After all, countries that have built high-speed rail networks mostly enjoy high levels of GDP,” he said.

According to the Ministry of Roads and Urban Development's last year estimations, more than $18 billion are needed to build one high-speed rail line between the cities of Tehran and Mashhad, the most popular train route in Iran with 2.3 million passengers per year. This is while several development projects have been left incomplete in the country.

“The question is how we go about pricing the tickets of an $18-billion rail project, even if the needed capital expenditure becomes available,” he said.

“Last year’s studies showed that a return ticket on this route—Tehran to Mashhad—must be around 20 million rials ($156), almost six times more expensive than the ticket prices of traditional trains. The country won’t recoup such an initial investment even if as many as 20 million trips are made on this route per year.”

Iran’s railroad network carries some 28 million passengers annually. The number of passengers on domestic flights stands at 17-18 million. Taking into account the number of passengers using international flights, the number of annual air passengers would exceed that of rail passenger traffic.

“Nearly 200 million road trips are made by buses and taxis annually and estimates reveal that people make more than 1.2 billion trips with their personal cars annually. The total number of domestic journeys hovers around 1.5 billion per annum, of which 28 million are made by train,” Sadeqi said.

Iran’s rail fleet consists of 2,089 passenger cars, 25,398 freight wagons and 1,000 locomotives. The number of passengers using suburban train services has increased from three millions in the fiscal 2014-15 to seven million last year (March 2018-19).

From the fiscal 2011-12 forward, rail freight transport has seen close to a 50% growth, improving from 33 million tons then to around 50 million tons of freight per annum in recent years, thanks to a new vision outlined by policymakers.