Railroad Development Pending Supply of Rails

EghtesadOnline: Some 4,000 kilometers of railroads are under construction in Iran, according to the deputy for construction and development at the Islamic Republic of Iran Railways.

News ID: ۷۷۴۲۴۵

28 February 2017

“Around 200 kilometers are ready to be launched while track-laying of 700-800 kilometers is in progress and will be completed by September 2017,” the Ministry of Roads and Urban Development’s news service quoted Jabbar Ali Zakeri as saying.

“The under-construction railroad projects extending over 3,000 kilometers are badly in need of rails.”

Iranian authorities have hinted on several occasions that a rail shortage in the country is hampering railroad development in Iran, according to Financial Tribune.

“There is not enough rails to meet the growing needs of our railroad projects,” IRIR’s former chairman, Mohsen Pourseyyed-Aqaei, said last year.

According to Minister of Roads and Urban Development Abbas Akhoundi, Iran needs 1.8 million tons of rails for its new railroad projects.

IRIR says Iran is in need of an average of 300,000-400,000 tons of rails annually to meet the needs of this key transport sector.

The 20-Year Vision Plan (2005-25) stipulates that the number of passengers using rail transport will increase from the current 25 million to 65 million per year.

The government has signed agreements to import rails, as efforts to domestically produce the commodity have failed to materialize.

In August, Indian steel and energy company Jindal Steel and Power Limited said it was going to ship head hardened rails–a specialty finished steel product–to Iran.

The unique product, which has applications in tracks for metro rails and high-speed bullet trains, is manufactured by the company at its Raigarh steel mill.

“JSPL is producing the world’s longest rail at its Raigarh factory. We have bagged an order from Iran to supply 1.5 million tons of head hardened rails over a period of one and a half years,” a senior company executive was quoted by the Indian English-language daily newspaper Business Standard as saying.

The New Delhi-based steel and energy company dispatched the first consignment of 1,700 tons of the rails, out of a total order for 150,000 tons to Iran in the same month (August).

The export of rails by Indian steel companies to Iran is seen as part of the pact between the two countries to develop railroads and other infrastructure at the strategic Chabahar Port in southern Iran.

New Delhi-based engineering and construction company IRCON International Limited is also building a rail line at Chabahar to move goods to Afghanistan.

National Rail: A Botched Project

IRIR’s move to import rails was criticized by Esfahan Steel Company, as it claimed it was prepared to launch its long-delayed rail manufacturing line.

The Ministry of Industries, Mining and Trade; Ministry of Roads and Urban Development; and ECSO teamed up a few years ago to promote the so-called “National Rail Project” to reduce reliance on imported rails.

The project, however, was delayed due to recession in the domestic steel market, ESCO’s financial woes and IRIR’s refusal to pre-purchase the steel tracks.

Eventually, a contract was signed early November 2016 to officially launch the manufacturing line. Nonetheless, no delivery has been made as yet.

Zakeri said there have been negotiations between ESCO and the Indian government to finance rail production by the Iranian steelmaker.

“Based on the talks, which have yielded results, India will supply ingots needed for rail production in ESCO. The costs will be covered through finance … Good quality UIC60 rails will be produced in Iran for the first time,” he said.

Zakeri noted that production will start in two months and that in the first phase 100,000 tons of rails will be produced.

Iran’s sixth five-year economic development plan (2017-22) stresses, among other things, the need to develop the rail transport network.

Tehran has signed several agreements with international companies to start new railroad projects and upgrade the existing routes.

The construction of a high-speed train between Tehran and Isfahan, as well as the ongoing rail project to connect the cities of Rasht and Astara as part of the International North-South Corridor, is among these projects.