Iran-Afghanistan Rail Linkup in Autumn

EghtesadOnline: Khaf-Herat railroad project is scheduled to be launched this autumn (Sept. 22-Dec. 20), says the deputy head of Construction and Development of Transportation Infrastructure Company, affiliated with the Ministry of Roads and Urban Development.

News ID: ۷۵۰۵۶۳

29 July 2020

Some 80 kilometers of the 220-km-long railroad are in Iran and the remaining 140 kilometers stretch from the common border to the Afghan city of Herat.

“The project has made 92% progress so far in the Afghan territory. As for the Iranian part, track laying on the route is underway,” Abbas Khatibi was quoted as saying by Mehr News Agency.

Besides the 80 kilometers located within its own borders, Iran has committed to the construction of 60 kilometers of the Afghan segment of this rail project.

Work on Khaf-Herat railroad started in the fiscal 2007-08. The project is part of Iran-Afghanistan rail corridor.

When completed, the rail route will be connected to the Central Asian and Chinese rail networks. This is estimated to considerably increase the volume of transit as well as passenger transportation in the region.

The corridor in its entirety, from Herat, Afghanistan’s third-largest city, to Khwaf, in Iran’s northeastern Khorasan Razavi Province, will connect Iranian mines to those of Afghanistan, while also connecting Afghan reserves to the international waters in southern Iran.

This will be Afghanistan’s first railroad link to Iran and the country’s only link to the Persian Gulf and Sea of Oman.

“Upon completion, the railroad will be used for the transportation of both passengers and cargo. However, exploiting its cargo capabilities is a priority for both governments,” Reza Ahmadi with Iran’s Roads Ministry has been quoted as saying by News.mrud.ir.

Ahmadi believes the railroad will have the capacity of transporting 27 million tons of cargo a year.

70% of Afghan Transit Trade Diverted Through Iran

The Asian Development Bank said in a recent report that although Afghanistan has traditionally relied on Pakistan as a gateway to international shipping routes, recent trends indicate that 70% of Afghan transit trade are now diverted through Iran.

The ADB’s Corridor Performance Measurement and Monitoring Annual Report 2019 states that Pakistan is still facing challenges in terms of removing barriers for road transport, Ariana News reported.

This shift away from Pakistan has been driven by lower costs from foreign ports and more attractive security deposit and detention tariffs for transit containers from shipping lines operating at Iran’s seaports.

The report stated that in addition, diesel in Iran ($0.06 per liter) is significantly less expensive than in Pakistan ($0.86 per liter), which provides an additional edge in terms of cost competitiveness.

In the absence of a formal agreement with Pakistan, shippers and carriers face uncertainty in transit procedures, it added.

The report further stated that the CPMM trade facilitation indicator reported longer average border-crossing time, although the average border-crossing cost was relatively unchanged.

Total average transport cost showed an improvement, but both measures of speed showed that trucks did not move as fast compared to 2018. The average border-crossing time between Afghanistan and Pakistan increased to 38.2 hours.

The time to cross Chaman was 60.1 hours, ranked as the most time-consuming border crossing point in 2019.

Peshawar took 45.8 hours and ranked the third most time-consuming, the report said.

These samples were estimated from commercial shipments carrying goods destined for Afghanistan as well as Central Asia.

Following the approval of its National Transport Policy in 2018, Pakistan embarked on a series of reforms and initiatives to address structural inefficiencies and impediments, increase exports through lowering cost and lead time of transportation.

The report recommended the implementation of the national single-window system and port community system to reduce cargo dwell time in seaports.

It said better parking area design and queuing systems could improve efficiency and speed up border crossing.

Pakistan does not yet have a domestic regulation on the international transport of goods via road.

The report also stated that the higher frequency of freight on rail and inland waterways would reduce freight costs and boost low-unit value exports such as agricultural produce.

Afghanistan and Pakistan have, however, reactivated talks on the Afghanistan–Pakistan Transit Trade Agreement 2010, which aims to attract transit from Central Asia to seaports south of Pakistan, the report stated.

KTAI Corridor Open for TIR Transport

An official with the Islamic Republic of Iran Customs Administration says the first successful TIR pilot operation from Shahid Rajaee Port in the southern Hormozgan Province was carried out to Kyrgyzstan via Afghanistan and Tajikistan—the so-called KTAI (Kyrgyzstan-Tajikistan-Afghanistan-Iran) corridor, IRNA reported on July 27.

“The KTAI corridor offers an alternative, short route between Iran’s southern ports and Central Asian countries,” Mostafa Ayati said.

Starting at Shahid Rajaee Port, two TIR trucks proceeded to cross Dogharoun border crossing into Afghanistan, then continued their journey to Tajikistan and then to their final destination: Kyrgyzstan.

With the completion of custom procedure at Dogharoun customs, the KTAI corridor is now officially open for TIR transportation.

The new trade route opens up the region to trade and development, and will enable freight forwarders and transport operators to benefit from significant cost and time savings when transporting goods.

According to World Bank reports, the total population of the four countries along the corridor stands at more than 128 million people and their combined total GDP equals close to half a trillion dollars.

The launch of KTAI corridor is designed to tap into these growing markets, the International Road Transport Union reported.

Given the route’s starting point of Shahid Rajaee Port, traders and transport operators can also take advantage of the intermodal and digital functions of TIR along the corridor, optimizing trade flows and driving growth in the region.