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https://financialtribune.com/articles/domestic-economy/117633/completion-of-rasht-astara-rail-project-extremely-significant
Completion of Rasht-Astara Rail Project Extremely Significant
Presently, the 164-kilometer Rasht-Astara railroad is the only remaining rail section of INSTC and the missing link for the direct rail link from the Persian Gulf to Moscow and St. Petersburg
What is necessity of the rapid construction and completion of the Rasht-Astara railroad project? Why do Iran and Russia have to cooperate with each other in this project?
These are questions Vali Kaleji, a Tehran-based expert on Central Asia and Caucasian studies, has sought to answer in an article he wrote for Valdai Club.
1. Following the first trilateral meeting of Iran, Azerbaijan and Russia on the prospects of the International North-South Transportation Corridor on Sept. 8, 2022, in Baku, Azerbaijan, the parties signed a trilateral statement for the development of INSTC. The countries agreed to increase freight transit through INSTC to 30 million tons by 2030.
“Trade turnover between Russia and Iran during January-October 2022 surpassed trade volumes during the whole of 2021 and totaled $4 billion, Russian exports to Iran increased by 27%, while imports hiked by 10%,” the deputy head of FCS, Vladimir Ivin, told the publication.
Since the major part of Iran's trade with Russia takes place from the western, more densely populated part of this country, including the cities of Moscow, Saint Petersburg, Kazan, Rostov and the North Caucasus, the main route of trade and transit between the two countries necessarily passes through the Republic of Azerbaijan. Given these circumstances, the lack of the 164-kilometer Rasht-Astara railroad has had a very negative impact on the volume and pace of trade along the main transit route between Iran, Azerbaijan and Russia, especially at the “Astara-Astara border crossing”. From here, via the 287-kilometer Astara-Baku national highway, trucks and containers are transported to Azerbaijan and Russia.
On average, a truck only crosses the Astara border every seven minutes. This issue causes heavy traffic and in some cases disruptions and long stops at the Astara (Iran)-Astara (Azerbaijan) border crossing, as well as the Samur border crossing on the border of Azerbaijan and Russia, that reduced the volume and speed of the transfer of goods via the corridor. The stoppage and several kilometer-long queues of trucks at the border crossing of Astara in January 2023 is the latest example of the problems at this border crossing. In fact, the increase in the volume of export, import and transit of goods, in a situation where there is only one 80-year-old metal border bridge between the two countries, has caused long queues of trucks and trolleys at the Astara border. To solve this problem, Iran and Azerbaijan signed a MoU on Jan. 26, 2022, to build the new “Astarachay bridge” with four lanes that can facilitate the process of transit between the two countries.
However, despite the construction of this bridge, the problem of traffic and long stops of trucks at the border terminals of Astara-Astara and Samour will not be completely solved. There are two solutions to this problem. First, expanding maritime trade and transit between Iranian ports in the Caspian Sea (Astra, Anzali, Caspian, Noshahr and Amirabad) with Baku Port in Azerbaijan, as well as Makhachkala, Olya, Astrakhan, Solyanka and Lagan - the main Russian ports in the Caspian Sea. It could reduce part of the traffic load of the land route in Astara-Astara-Baku-Dagestan. The second solution is construction of the 164-kilometer Rasht-Astara railroad that will reduce the time needed to transport cargo from Russia to Iran’s southern ports on the Persian Gulf and on the Sea of Oman by 20 days.
2. The lack of this railroad connection has made it inevitable that freight at the Astara train station on the Iranian side will be transferred to trucks, or vice versa. It is clear that this slows down trade and transit between Iran-Azerbaijan-Russia. If the 164-kilometer Rasht-Astara railroad is completed, cargoes and containers from Moscow and St. Petersburg can be transported directly and non-stop to Bandar Abbas in the south of Iran in the Persian Gulf. On the other hand, the goods imported by Russia from India, Arab countries and Iran can also be transferred to the Republic of Azerbaijan and Russia with speed, low cost and high volume from the southern ports of Iran in the Persian Gulf. But as mentioned before, at the present time the 164-kilometer Rasht-Astara railroad is the only remaining rail part of INSTC and is the missing link for the direct rail link from the Persian Gulf to Moscow and St. Petersburg.
3. Another important necessity of establishing the 164-kilometer Rasht-Astara railroad is “EEU-Iran Preferential Trade Agreement”, which was implemented on Oct. 27, 2019, and can be upgraded to a Free Trade Agreement. It is expected to become operational by late September 2023 after being approved by the IAEA member countries”. Since the Free Trade Agreement involves more than 7,500 types of commodities, it is obvious that this trade regime naturally need to more rapid and extensive in facilitating the movement of goods between Iran and the EEU —especially with the Russian Federation. Given these circumstances, there is no doubt that the land route of Astara-Astara-Baku-Dagestan cannot go ahead with the increasing volume of Iran's exports and imports with the EEU, especially Russia. The stoppage and queue of several kilometers of trucks at the border crossing of Astara in January 2023 was a serious alert for Iran, Azerbaijan and Russia. Therefore, in the process of free trade, in parallel with the development of the land route and border terminals as well as sea trade in the Caspian Sea, the construction and completion of the 164-kilometer Rasht-Astara railroad should be considered as a strategic and important priority for Tehran, Baku and Moscow. Streamlining and facilitating trade and transit is for the benefit of all three countries and there is no loser in this process.
4. Two complementary railroads for the Rasht-Astara railroad are under construction in the north and south of Iran. First, the 35-km Rasht-Caspian railroad in Iran’s northern Gilan Province to the Caspian port, which is a seaport located in the Anzali Trade-Industrial Free Zone. If the 164 km Rasht-Astara railroad is completed, Astara Port in Gilan province will also be connected to the Iranian rail network. At the present time, construction work has been completed on the first 11 km of the 35 km stretch of the Rasht-Caspian railroad and the remaining 24 km should be completed in 2023. The second complementary railroad is the 628-kilometer rail project, which is aimed to connect Chabahar Port to Zahedan (the capital city of southeastern Sistan-Baluchestan Province). Iran hopes it can be completed by March 2024. If the 164-km Rasht-Astara railroad and the 625-km Chabahar-Zahedan railroad are built and completed, it will be possible to transfer cargo and containers from Chabahar Port - as the “only oceanic port” of Iran - directly to the Republic of Azerbaijan and Russia. Currently, due to the non-completion of the Chabahar-Zahedan railroad, there is a possibility of exporting and importing from Bandar Abbas, which is connected to Iran's rail network.
5. Construction of the 164-kilometer Rasht-Astara railroad is very important in transit and trade between India, Iran and Russia, the three courtiers which founded INSTC on May 16, 2002. Indeed, India has a key role in the Chabahar Transit Project that was created among India, Iran, and Afghanistan on May 24, 2016; recently Uzbekistan joined it. Although India has always been one of Russia's main trading partners, according to trade, transit and financial sanctions levied against Russia by the West, the volume of trade and transit exchanges between India and Russia has increased significantly. Given these circumstances, Iran's rail network connected to Bandar Abbas is one of the most important transit options in India, which can transport goods to Rasht in the north of Iran. However, the lack of the 164-kilometer Rasht-Astara railroad causes the trains at the Rasht train station to transfer goods to trucks, and vice versa in Astra, Azerbaijan. Therefore, the non-completion of this railroad is considered an inhibiting factor in the development of trade and transit between India and Russia, especially given the current situation.
In general, although the 164 km Rasht-Astara railroad is comparatively short, it has great strategic and transit importance. It can play a very important role in increasing trade and transit between India, Iran, Azerbaijan and Russia. This railroad can also connect Bandar Abbas and other Iranian ports in the Persian Gulf to Russia, especially Moscow and St. Petersburg., that can lead to increasing trade and transit between Arab countries such as the United Arab Emirates, Qatar and Oman and Russia. Completion of the 164 km Rasht-Astara railroad, as the only remaining rail part of INSTC, will help this corridor achieve its desired goals of creating a “multifaceted corridor” and “combined network” of ships, rails, and road freight routes, two decades after its formation in 2002.
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