Iran to Expand Transportation Corridors at Full Throttle

The corridor was officially launched on June 26 with the arrival of an Iranian vessel at the Caspian Port in Gilan Province’s Anzali Free Trade Zone. 

What can Iran gain from joining international transportation corridors, which pass through its territory from the Far East and Central Asia to Russia and Europe, in the face of the reimposition of US sanctions on its economy? 

These corridors are used for imports and exports to and from Iran as well as transits through the country. As is evident, the sanctions have targeted Iran’s trade, which will have a negative impact on transportation, Financial Tribune reported.

 Economic Restrictions Are Temporary

“We have numerous agreements on international transportation corridors with other countries. Some have expired and others are being studied or negotiated. Many projects are at hand and we are in talks to renew these agreements,” Amin Taraffo, director of International Corridors Bureau affiliated with the Ministry of Roads and Urban Development, told Financial Tribune. 

“We cannot deny that there are threats to our trade and related activities. Yet, our plans and endeavors in the field of transportation, which is a prerequisite for trade to take place, are not going to be thwarted.”

Taraffo said he believes restrictions imposed on the Iranian economy will not last forever and will be short-lived.

“Iran cannot be eliminated from trade and trade-related activities since it is located at strategic crossroads between Asia and Europe. Though sanctions will slow us down, we are not going to remain passive or set aside the goals we have defined,” he said.

 A Chance to Make Changes 

Taraffo noted that the ministry is working in collaboration with other bodies to redesign infrastructure and revise regulations so that when sanctions are finally lifted and banking and insurance facilities and rights are restored, transportation and trade can immediately be fast tracked to achieve the economic goals.

“We will persist in our steadfast efforts to connect to the world, despite economic limitations,” he said.

He added that Iran is providing a wide range of transportation incentives to spur transit. 

For example, the Islamic Republic of Iran Railroads is considering considerable discounts for Central Asian states. The Ports and Maritime Organization is doing the same for goods in transit through Iranian ports. Commodities transited through Chabahar Port, for instance, will enjoy a 90% discount.  

 Growth in Transit Volume

Transit through Iran stood at more than 3.93 million tons during the first four months of the current Iranian year (March 21-July 22), indicating a 15.4% increase compared with the similar period of last year, according to the official.

Road transit accounted for around 3.3 million tons of the total sum and the remaining 635,000 pertained to rail transits.

Last year’s transit volume hit 10.8 million tons. 

Plans are in place for increasing the figure to 16.5 million tons and 17.1 million tons in the current year (March 2018-19) and the next respectively.

“Transportation and transits are taking place in international corridors passing through Iran. But the goals we have set for these corridors are tens of millions of tons per year and on most of these routes, we are far from fulfilling these goals,” he said.

 Need to Address Faulty Trade Policies

Taraffo said the problem is not with infrastructure or the viability of these corridors. 

“To achieve these objectives, we need to engage in activities other than those related to transportation. True, we have to provide suitable and modern rail, road and port infrastructure and ease or change the existing regulations. But what use is this, if there is no or little trade between countries along these corridors. What makes these corridors work below their full capacity is our faulty trade policies. This is where we have to start serious work,” he said.  

The official was gladdened by the fact that trade issues have been placed on the agenda of the upcoming International North-South Transportation Corridor Ministers Forum, alongside specialized transportation topics.

“The forum was scheduled to be hosted in Tehran in September, but the event will be postponed until sometime in winter,” he said.

Taraffo concluded that the efficient expansion of economic cooperation between the countries involved in transportation corridors needs to focus on realizing their full capacity.