New North-South Corridor to Cut Transit Time to Europe by Half

EghtesadOnline: The new North-South transit route passing through Armenia will be a new development in Iran’s relationship with the neighboring country and Europe, as it will be economical and competitive with other parallel corridors, says Deputy Minister of Roads and Urban Development Kheirollah Khademi.

News ID: ۷۸۷۲۱۳

27 October 2021

Iran seeks to enhance its transit advantages by constructing new international routes. New road, rail and sea routes have been constructed to serve this purpose, to make access easier for Iran and other countries along the International North-South Transport Corridor and to Europe, reduce the travel time and lower transportation costs.

Referring to Iran’s cooperation with neighboring countries, Khademi said the construction of new roads, besides completing the roads under construction, is a long-term plan for the development of Iran’s international roads.

“In addition to connecting Iran and neighboring countries to other parts of the world, our transit corridors are viewed as regional routes. Thus, the advantages of international routes are not restricted to European access,” he was quoted as saying by the Persian-language daily Iran.

On the transit corridor under construction from Iran to Armenia, the official said, “Among the existing and under construction routes, this corridor will be of special importance for Iran, Armenia and countries that will use it. Iran and Armenia had long-term plans since years ago to upgrade the North-South corridor; it has nothing to do with recent political developments [with Azerbaijan Republic]. Accordingly, a new, shorter corridor with better infrastructure, including few tunnels and bridges, will be constructed between the two countries. The northern part of this corridor will be built from Yerevan toward Georgia while the southern 64-km segment, which leads to Iran and is located in a mountainous area, is under construction. When finished, the North-South transit route from Iran to Armenia will be reduced by half; it will be an economical and competitive corridor constructed with the participation of Iranian contractors and engineers.”

The connecting route will pass through the Iranian border to Armenia and then to Georgia, the Caucasus and Europe. Armenia’s long-term plan is to build Section IV of this corridor and Iran has signaled its readiness to help finalize the project.

Post 2020 Nagorno-Karabakh War Situation

During the 2020 Nagorno-Karabakh war between Armenia and Azerbaijan, part of the main transit corridor used by Iranian trucks to reach Armenia (21 km), which previously belonged to Armenia, came under the jurisdiction of Azerbaijan.

Later, Azerbaijan announced that trailers passing through Iran to Armenia must pay toll to cross this route. Therefore, trucks passing from Iran to Armenia have to pay the toll twice: once for the 21-kilometer route on the border with Azerbaijan and once for entering Armenia, which has increased transportation and shipping costs.

To resolve the problem, an alternative route has been planned so that trucks can enter Armenia directly instead of crossing the 21-kilometer route on the Azerbaijani border. In fact, the new road will allow trucks traveling through Armenia to go directly to Yerevan from Iran without the need to pass through Azerbaijan.

“The current route from Iran to Yerevan is about 400 kilometers, it is one of the international and regional transit corridors from Iran through Armenia to Georgia-Caucasus and then to Europe. Truckers and passengers have protested against increased toll payments. There are two options to facilitate the crossing of passengers and trucks, either the additional toll must be removed or a new route must replace this 21-kilometer road,” he said.

“Iran has entered into negotiations with Armenia to provide a new route for freight and passenger access to Armenia. During the first phase, an alternative bypass road will be built to replace the 21-kilometer route, the first part of which will be operational within a month. In the second phase, a fundamental measure will be taken, that is, launching the construction of a 31-kilometer corridor. Nineteen kilometers of this 31-kilometer corridor will be a new road and 12 kilometers will be the existing road. As a result, trucks and passengers won’t need to cross 21 kilometers of the border with Azerbaijan.”

Khademi said the new route is shorter than the previous one, so once it becomes operational, transportation costs will decrease, but to avoid the abandonment of the 21-kilometer route on the border with Azerbaijan, Iran and Armenia have agreed to construct a new bypass in the same area.

Rail, Sea Routes

There is also an important transit corridor from Iran to Azerbaijan, which is currently operational.

A railroad from Iran’s Astara to Azerbaijan’s Astara, which is the final part of North-South Rail Corridor, is under construction. The International North-South Transport Corridor is a major key corridor for Iran, which can provide substantial revenues.

“Over the past two years, the Caspian Sea route to Russia has become operational as well and our northern ports are playing a more important role when it comes to shipping cargo from south to north. Amirabad Port in the northern Mazandaran Province and a few ports of Gilan Province have become equipped with Ro-Ro [roll-on/roll-off] vehicle shipping services; Ro-Ro ships will make transportation of cargo from Iran to Europe safer and more economical. With the launch of shipping lines from northern ports to Russia, cargoes will be carried to Russia directly and exporters will be able to avail themselves of the advantages of sea transport,” Khademi said.

INSTC is a major transit route designed to facilitate the transportation of goods from Mumbai in India to Helsinki in Finland, using Iranian ports and railroads, which the Islamic Republic plans to connect to those of Azerbaijan and Russia.

The corridor will connect Iran with Russia’s Baltic ports and give Russia rail connectivity to both the Persian Gulf and the Indian rail network. This means goods could be carried from Mumbai to the Iranian port of Bandar Abbas and further to Baku. They could then pass across the Russian border into Astrakhan before proceeding to Moscow and St. Petersburg, before entering Europe.

INSTC substantially cuts the travel time for everything from Asian consumer goods to Central Eurasia’s natural resources to advanced European exports.