Iran Railroad Transit Up 50%

EghtesadOnline: Close to 1.6 million tons of goods were transited through Iran’s railroads in the last Iranian year (March 2017-18), indicating a more than 50% rise compared with the year before, a deputy minister of roads and urban development said.

News ID: ۷۸۲۵۷۵

13 May 2018

Saeed Mohammadzadeh, who doubles as the CEO of the Islamic Republic of Iran Railways, added that the government aims to increase rail transit to 20 million tons per year in the next 10 years, the news portal of the Ministry of Roads and Urban Development reported.

The Sixth Five-Year Development Plan (2017-22) is targeting 5 million tons in annual rail transit, according to Financial Tribune.

“We are behind schedule. To arrive at this goal, we need to establish the required infrastructure and gain the trust of cargo owners,” Director of IRIR Transit Commission Hossein Ashouri was quoted as saying by Mehr News Agency.

The official noted that the current transit capacity in Iran allows the transportation of 50 million tons of goods per year, yet software problems and bureaucratic obstacles prevent the sector from realizing this capacity.

Cargo transported from southern Iranian ports to Turkey and Central Asia hold the biggest share in Iran’s rail transit. Iran has rail connections with Turkmenistan, Pakistan, Turkey and Iraq.

Record in Freight Transport

According to Saeed Rasouli, a board member of IRIR, rail freight transport stood at a record high of 46 million tons last year, indicating a 14.4% growth compared with the year before.

About 40.2 million tons of goods were transported via rail in the previous year (March 16-17), which was also a record high at the time.

By contrast, 430 million waybills were issued for road freight transportation last year, which dwarfs the volume transported by rail.

“About 24.45 million passengers were transported through Iran’s railroads in the last fiscal year, showing a 6.3% rise compared with the previous year,” Mir Hassan Mousavi, the deputy for passenger affairs with the Islamic Republic of Iran Railways, said.

“The country’s suburban railroad system transported 6.1 million passengers, registering a 16.6% increase year-on-year.”

Aggressive Expansion Plan

Iranian rail authorities are aggressively pursuing expansion plans to facilitate transportation, conserve hydrocarbon fuels and reduce air pollution.

According to Mohammadzadeh, transportation of each ton-kilometer of cargo via railroad saves up to 1.3 cents in fuel consumption (compared to road transportation).

Iran’s Sixth Five-Year Development Plan (March 2017-22) has tasked the government with increasing the share of rail in cargo transportation from the current 12% to 30% by the end of the plan.

IRIR and the Construction and Development of Transportation Infrastructure Company both affiliated with the Ministry of Roads and Urban Development laid tracks for more than 1,300 kilometers of railroads last year, which is a record high over the past 90 years.

The government plans to connect five provinces to the national railroad system by the end of last year culminated in Hamedan and Kermanshah railroads meeting the deadline.

Kheirollah Khademi, deputy roads and urban development minister, said three rail projects, namely Urmia, Rasht and the second track of Tabriz railroads, will come on stream in the first half of the current Iranian year that started on March 21.

Making Iran a giant crossroads are two grand trade routes linking the Pacific, Indian and Atlantic oceans. One is the International North-South Transport Corridor and the other is China-to-Europe Silk Road.

The idea behind INSTC is that containerized goods will be transported from Mumbai Port to Iran’s Persian Gulf coast–bypassing Pakistan–from where they will be able to reach Moscow and Europe in half the time taken by the Suez Canal.

The route has also been estimated to save $2,500 for every 15 tons of cargo.

Iran, Russia and India signed a convention for launching INSTC in 2000.

The other axis of the crossroads is China’s Silk Road, arguably the infrastructure project with the highest priority in Beijing.

A high-speed standard gauge line running through Central Asia would slice through a knot of broad gauge lines in the states of the former Soviet Union and speed up the flow of goods to Europe, compared to sailing round the long way.

So, the stakes riding on the Iran’s rail schemes are high, both for the Iranian economy and for the whole of Asia, as it reconfigures itself for the 21st century.