The minister noted that the agreement will be signed during the visit of Iranian President Hassan Rouhani to Azerbaijan later this month, Trend News Agency reported.
The railroad construction is expected to be completed within three years.
Mustafayev stressed that the opening of the railroad, which is part of the International North-South International Transport Corridor, will allow the delivery of goods from the West to the East and vice versa, Financial Tribune reported.
“This will increase the economic potential of our countries and not only ours, but of the entire region. Thus, Azerbaijan and Iran will contribute to ensuring security in the region,” he added.
Previously, it was reported that the cost of the loan agreement is $500 million.
The INSTC project is designed to connect northern Europe with India and Southeast Asia. The route will also connect the railroads of Iran, Azerbaijan and Russia.
INSTC 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 in India 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.
The corridor would substantially cut the travel time for everything from Asian consumer goods to Central Eurasia’s natural resources to advanced European exports.
From the Iranian border city of Astara, the rail route will extend to an eponymous city on the Azerbaijani side of the border.
A freight train arrived in Iran’s northern border city of Astara from Russia’s St. Petersburg on Feb. 8, marking the inauguration of a cross-border strand of INSTC. The train made its journey through Azerbaijan, using the so-called Astara-Astara Railroad, which connects the Iranian city of Astara with an eponymous city from across the border.
According to Abbas Nazari, director general of the Islamic Republic of Iran Railways’ International Affairs Office, the Astara-Astara route will officially be inaugurated in the first month of the next Iranian year (starting March 21) in the presence of Iran’s President Hassan Rouhani and his Azerbaijani counterpart Ilham Aliyev.
“IRIR is also in talks with Azerbaijani and Russian rail officials to run passenger trains from Astara to Moscow on this route, in addition to commercial trains,” Nazari said.
The Astara-Astara Railroad runs 8 kilometers in Azerbaijan up to the border from where it extends 2 km to Iran’s port city of Astara.
The project also includes a bridge on Astarachay River, which stretches along the border. Tehran and Baku are working to connect their railroads as part of the INSTC project, which is aimed at connecting Northern Europe with Southeast Asia.
Qazvin-Rasht Railroad
The railroad to connect the two Iranian cities of Qazvin and Rasht has made more than 80% progress and is scheduled to come on stream during the second month of the next Iranian year, according to an official with the Construction and Development of Transportation Infrastructure Company affiliated with the Ministry of Roads and Urban Development.
“The track-laying of the 164-kilometer-long project will be completed by the end of the current Iranian fiscal (March 20). So far, 14.6 trillion rials (close to $325 million) worth of investments have gone into Qazvin-Rasht Railroad that needs an additional $55.64 million to be completed,” Ali Akbar Mardi was also quoted as saying by IRNA last month.
Leading a delegation of Azerbaijani officials and businesspeople, Mustafayev arrived in Tehran on Monday for a three-day visit to attend and co-chair the 12th meeting of Iran-Azerbaijan Economic Commission of the two countries.
Iran’s Minister of Economic Affairs and Finance Masoud Karbasian was the other co-chairman of the joint commission.