Iran's Cargo Transit Capacity Fivefold Higher Than Actual Transfer

EghtesadOnline: Iran’s nominal cargo transit capacity stands at 50 million tons per year, which is fivefold higher than the actual volume of transit, according to Minister of Roads and Urban Development Mohammad Eslami.

News ID: ۷۴۹۲۸۹

25 December 2019

“Some 80% of the 10 million tons of freight are transited annually via roads and the remaining 20% by railroad,” Eslami was quoted as saying by the news portal of the ministry.

The minister noted that since 2013 when Hassan Rouhani first took office as Iran's president, some 4,000 kilometers of highways and 220 kilometers of freeways have been constructed across the country, according to Financial Tribune.

“We will have built around 2,000 kilometers of asphalt roads connecting our rural areas by the end of the current Iranian year [March 19, 2020]. Plans are to construct 3,000 kilometers of rural asphalt roads next year. Some 1,100 kilometers of railroads will be laid by the end of the second term of President Rouhani [August 2021],” the minister was quoted as saying by IRNA.

“This year we succeeded in gaining permanent membership in the Council for Rail Transport of the Commonwealth of Independent States, which will boost transits through the country in the near future," he added.

Iran became a permanent member of CIS Council for Rail Transport during the council’s 70th meeting in the Finnish capital, Helsinki, on May 14-15.

Russia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Uzbekistan, Georgia, Latvia, Finland, Lithuania, Estonia, Azerbaijan, Ukraine and Iran are now permanent members of the CIC council.

According to deputy roads minister and the head of Construction and Development of Transportation Infrastructure Company of Iran, Kheirollah Khademi, Iran’s railroad network extends over 13,945 kilometers while more than 3,000 kilometers of railroads are under construction.

“We have 2,395 kilometers of freeways operating and more than 1,200 kilometers more are being constructed. There are 42,000 kilometers of highways and main roads, and over 7,000 km more are being built across the country,” he said.

Mohammad Teymouri, the deputy head of Road Maintenance and Transportation Organization for Management and Resources Affairs, said Iran’s urban and rural roads stretch over 220,000 kilometers.

Teymouri added that these roads are worth 2 quadrillion rials, or close to $15.4 billion based on the fiscal 2015-16 prices.

“At present, 7,600 companies are active in the road transportation sector. More than 600,000 drivers transport 600 million tons of cargo and 1 billion passengers every year, using over 350,000 trucks and 100,000 passenger transportation vehicles,” he said.

“Around 1.2 million people are employed in the road transportation sector of Iran.”

Transit Trucks Tally

Iranian trucks transited 9.08 million tons of commodities through the country during the last Iranian year (March 2018-19) to register a 2.18% decline compared with the previous year, according to latest data released by the Road Maintenance and Transportation Organization of Iran, affiliated with the Ministry of Roads and Urban Development.

More than 433,000 trips were made by transit trucks during the period under review, showing a 4% decline year-on-year.

A total of 7.62 million tons of goods were exported by trucks, registering a 14.46% rise YOY. About 335,000 trips were made to conduct exports, indicating a 13.56% increase YOY.

Nearly 1.76 tons of goods were imported into Iran via trucks showing a 16.88% decrease YOY. The number of trips made to transport the imported goods dropped 22.6% to around 89,000.

Amir Mahmoud Ghaffari, deputy minister of roads and urban development for planning and resource management, said the government needs 1.8 quadrillion rials ($13.84 billion) in financial resources to complete transportation projects.

The official said the government has prioritized the completion of 11 freeway construction projects, which will stretch over 1,247 kilometers.

Rise in Transit Income Last Year

Iran's income from air, sea and land transit of goods saw a 14% year-on-year rise to reach $2.9 billion during the first 10 months of the last Iranian year (March 21, 2018-Jan. 21, 2019), latest available data released by the Trade Promotion Organization of Iran shows.

Situated along several international transport corridors, Iran is a hub for transit of goods through railroad, road, air and maritime transportation, IRNA reported.

Rail and road transit saw a 31% and 18% growth while that of air and maritime transport declined by 8% and 6% to stand at $152 million, $2.31 billion, $366 million and $133 million respectively.

Chabahar: Iran's New Transit Hub

Last year, Afghanistan launched a new export route that will ease the flow of goods from the country to India through Iran’s Chabahar Port, the Diplomat reported.

The Zaranj-Chabahar route allows Afghan goods to reach India without crossing Pakistani territory. Pakistan’s borders with both India and Afghanistan are tightly controlled, with minor land-based trade between the countries.

India has invested in the route’s major port facilities at Chabahar and helped develop a road—the Zaranj-Delaram highway—connecting Afghanistan’s national Highway 1 to the Iranian border.

Zaranj is the final Afghan destination near the Iran border crossing. The Zaranj-Delaram road turns into Iranian highway A-71 across the border, which runs westward to Zabol. From Zabol, Afghan freight can travel southward to Chabahar Port by using national highways 99 and 95.

India has also supported the initial stages of a railroad connecting Chabahar to the Iranian city of Zahedan.

After more than a decade of Indian interest in Chabahar, Indian Prime Minister Narendra Modi concluded a trilateral agreement to develop the port with his Afghan and Iranian counterparts in May 2016.

“Chabahar Port is the result of healthy cooperation among India, Iran and Afghanistan, which will ensure economic growth,” Afghan President Ashraf Ghani said at the inauguration of the trade route on Sunday in Afghanistan’s western Nimroz Province.

In 2017, 15,000 tons of Indian wheat, for the first time, used the Chabahar route to travel to Afghanistan.

Haroon Chakhansuri, a spokesperson for Ghani, said the shipment marked the first end-to-end use of the trade route for Afghan exports.

“As part of the transit routes inaugurated by the Afghan government, the first shipment of Afghan goods will head to Chabahar Port from Zaranj city through Abrisham Bridge and then to India. This is the first time Afghanistan will be directly connected with India by using Chabahar Port,” he said, according to Afghanistan’s Tolo News Agency.

Iran and India have agreed to accelerate work on the strategic Chabahar project after Indian External Affairs Minister S Jaishankar held wide-ranging talks with his Iranian counterpart Mohammad Javad Zarif on regional and global issues of mutual interest on Sunday.

Chabahar Port—jointly developed by India, Iran and Afghanistan—is considered a gateway to golden opportunities for trade with Central Asian nations by the three countries. It is located on the Indian Ocean in the Sistan-Baluchestan Province of Iran, Press Trust of India reported.

Jaishankar, who was on a two-day visit to Iran, co-chaired the 19th Commission Meeting with Zarif.

The meeting comes after the US provided a rare exemption to India from sanctions on Chabahar Port in Iran as Washington said it recognized that the strategic project was a lifeline for war-torn Afghanistan to get humanitarian supplies from India.

India, Iran and Afghanistan have decided to open Mormugoa and New Mangalore Port, in addition to JNPT, Mundra, Kandla and Cochin as part of designated routes under the Chabahar agreement for connecting South Asia’s biggest country to the strategically located port.

This was decided at the second meeting of the follow-up committee for the implementation of the trilateral Chabahar agreement signed by India, Afghanistan and Iran at the level of joint secretary/director general held here on Friday.

"The three countries welcomed steady progress in port operations by India Ports Global Ltd Company since taking over the port operations of Shahid Beheshti Port at Chabahar in December 2018. It was recognized that over 500,000 tons of cargo have been handled successfully. This includes exports from Afghanistan through Chabahar Port, which began in February 2019," India's Ministry of External Affairs said in a statement.

It was agreed to organize promotional and business events in Afghanistan and India to popularize Chabahar Port.