Tehran, Baku Team Up as Rail Infrastructure Expands

EghtesadOnline: At the end of March, Iranian President Hassan Rouhani traveled to Azerbaijan to mark the opening of bilateral segments of the International North-South Transport Corridor.

News ID: ۷۸۲۲۵۵

10 April 2018

INSTC, which has been lauded by Russian President Vladimir Putin as a “flagship project”, will be a nearly 4,500-mile-long (7,242 kilometers) network, comprising rail, road and water routes with the goal of stimulating trade involving Russia, Iran, Central Asia and India, the Armenian Weekly wrote in an article. Below is the full text.

Three railroad segments connecting the northwestern city of Qazvin to the border city of Astara are slated for construction inside Iran in the next three years.

According to news site AzerNews.az, the portion linking the city of Astara, Iran, to its namesake city in Azerbaijan was launched on March 29, Financial Tribune reported.

In the opening ceremony, Hossein Ashouri, on the board of directors of the Iranian state-owned rail body, noted that an agreement for $500 million would be signed during the Iranian president’s visit to go toward the further construction of the railroad.

Alexander Karavaev, a researcher at Moscow State University’s Institute of Economics, said the grain regions of the Russian Federation eagerly await the new railroad, as it will counteract the 2016 ban Iran had introduced on Russian wheat imports to support its local farmers.

Before the ban, Iran was the third largest buyer of Russian wheat after Egypt and Turkey.

Minister of Agriculture of Russia’s Stavropol Territory, Vladimir Sitnikov, said the opening of the Azerbaijani transport direction will increase the purchase price of the Stavropol grain by 10-15% and the opening of these segments of the corridor will shorten the delivery time from seven to five days, equaling a 30% reduction in transportation-related costs.

President Rouhani’s Baku trip was a reminder of intensifying good relations between the two countries in recent years.

“It is important to recall that before Hassan Rouhani was elected, Baku-Tehran relations were rather tense,” says political scientist, Rovshan Ibragimov, speaking with Vestnik Kavkazabut.

“Iran’s foreign policy towards the northern neighbor radically changed under Rouhani and became constructive.”

To this end, a total of eight collaborative agreements were signed during the president’s visit, only one of which dealt expressly with the railroad.

The two nations have arranged for a number of cultural and social initiatives, as well, including an “Executive Plan on Cooperation Between the Ministries of Youth and Sports Affairs” and a “Culture and Arts Exchange Program” to take place between 2018 and 2021.

The Iranian president also participated in an inaugural ceremony of a joint Azerbaijani-Iranian car manufacturing factory.

“We always stand by Azerbaijan,” Rouhani stated at one point, praising collaborations between the two countries.

“If Iran is safe, Azerbaijan will be safe, too. Likewise, if there is development in Azerbaijan, there will be development in Iran as well.”