Yerevan Decides to Start Chabahar Port Operations

EghtesadOnline: Armenian Prime Minister Nikol Pashinyan signed a decree on May 8 on setting up an inter-agency taskforce for launching a new international cargo transportation route and becoming an operator at Iran's Chabahar Port.

News ID: ۷۵۲۵۲۶

10 May 2023

Armenian Prime Minister Nikol Pashinyan signed a decree on May 8 on setting up an inter-agency taskforce for launching a new international cargo transportation route and becoming an operator at Iran's Chabahar Port.

According to the decrees, posted on the government’s website, the taskforce will deal with organizing a multimodal high-speed route of international cargo transportation via Armenia, ARKA news agency reported.

The taskforce’s goals include discussions and development of a new corridor for cargo transportation with the participation of Armenia, which will connect the countries of East Asia, India and Iran with Europe through Georgia and the Black Sea and in the opposite direction as an alternative to the North-South international transport corridor.

The new route is to connect Europe with India and East Asian countries through the Indian Ocean.

The taskforce will be headed by the Armenian minister of economy. The minister will have to report to the prime minister the progress on a quarterly basis, with final results to be submitted before Nov. 1, 2023. The taskforce must establish contacts and discuss technical and other issues with relevant departments of India, Georgia and Iran.

On April 20, Yerevan hosted the first political consultations in trilateral format between the foreign ministries of Armenia, Iran and India. The issues discussed at that meeting included new economic, regional and communication channels, as well as the prospects for deepening trilateral cooperation in various areas.

Parallel to INSTC

The proposed corridor, which will run parallel to the International North-South Transportation Corridor, will aim to connect Mumbai with Bandar Abbas in Iran and then Armenia and onward to Europe or Russia, bypassing Azerbaijan with whom India has lukewarm ties amid its close association with Turkey and Pakistan, The Economic Times reported earlier.

Armenia, whose ties with India have witnessed an upswing in recent years buoyed by defense exports from here, has sought Indian investments for the corridor in the Armenian territory, sources in the Armenian government indicated to ET.

Since the beginning of the Russia-Ukraine war, India's trade with Russia has increased manifold via the INSTC that connects Mumbai with Russia via Iran and the Caspian Sea. Azerbaijan is a key element under INSTC but has been slow in completing an infrastructure link under INSTC. Historically, Armenia shares strong political and business ties with Iran.

"As the new cold war disrupts Russia-West economic and political relations, any large-scale transit of cargo passing the Russia-Europe border looks too risky for the international logistic and insurance companies," Benyamin Poghosyan, founder and chairman of Yerevan, Armenia-based Center for Political and Economic Strategic Studies and senior research fellow at APRI-Armenia, told ET.

"At the same time, India's need for additional trade routes to reach Europe circumventing the Suez Canal remain valid. In parallel to the discussions around INSTC, Iran in 2016 put forward a new international transport corridor project, Persian Gulf-Black Sea, which should connect Iran with Europe via the South Caucasus. The negotiations were paused during the Covid pandemic, but all potential participants of the project-Iran, Armenia, Georgia, Azerbaijan, Bulgaria and Greece-expressed their interest in participating."

The Persian Gulf-Black Sea corridor fits well into India's plans as it looks for additional routes to reach Europe, circumventing the Suez Canal and avoiding the negative impact of Russia-West confrontation. The corridor itself may connect Iran with Georgia via either Armenia or Azerbaijan. Armenia and Azerbaijan have railway and highway connections with Georgia, and Azerbaijan has a railroad up to the Azerbaijan-Iran border.

There is a missing link of some 165 km inside Iran (the Rasht-Astara line) to connect the railroads of Azerbaijan and Iran. In January 2023, Russia and Iran agreed to launch the construction with Russian funding. Azerbaijan also has a highway connection with Iran, Poghosyan explained.

Given the extensive experience of Indian companies in taking part in large-scale infrastructure projects abroad and India’s interest in launching the India-Europe transport corridor route via Iran and Georgia, Armenia plans to start negotiations with India to discuss the involvement of Indian funding and Indian companies into the project. Armenia has witnessed strong economic growth in the region notwithstanding the war in the region.

Turkmenistan-Iran-Iraq-Turkey Transport Corridor on Agenda

Turkmenistan's President Serdar Berdimuhamedov announced recently that the country is planning to establish a transport corridor connecting Turkmenistan with Iran, Iraq, and Turkey.

Speaking at the Second International Conference "International Transit and Transport Corridors: Interaction and Development 2023," held in the capital Ashgabat, Berdimuhamedov stated, as reported by the Neytralny Turkmenistan newspaper, "In the future, a transport corridor from east to west will be launched, connecting Turkmenistan, Iran, Iraq, and Turkey."

The president further elucidated that the construction of a highway and bridge spanning the Garabogazkol Bay, situated between Turkmenistan and Kazakhstan, would significantly augment the partnership in transportation, commerce, and trade between the two nations.

In addition to the aforementioned developments, President Berdimuhamedov explicated that a high-speed route linking the eastern and central portions of Turkmenistan would facilitate Uzbekistan's access to the International Maritime Port on the Caspian Sea. This port serves as a gateway to the Caucasus, Europe, southern Russia, northern Iran, Persian Gulf countries and the Strait of Hormuz via maritime routes.