IRAN: Rail Link With Central Asia to Help End Isolation

By IPS Correspondents Reprint | | Print |

Kalinga Seneviratne

TEHERAN, Sep 29 1996 (IPS) - By hooking up the Central Asian republics for the first time by rail to warm water ports, Iran has opened up new economic and diplomatic opportunities for itself.

Besides bringing a business bonanza for its underused rail system, the rail link between the northern Iranian rail head of Mashhad and the town of Tajan in Turkmenistan, is expected to help Teheran resist Western attempts to isolate it.

Opened in May in a grand ceremony attended by 12 heads of state and government, the rail line is a realisation of the centuries- old Central Asian aspiration for an outlet to the Persian Gulf.

A consortium of seven Iranian companies has extended the more than seven-decade-old Iranian rail system from the city of Mashhad to Sarakhs, which is on the Turkmenistan border 165 kilometers from Mashhad.

“We have attached high priority in our foreign policy to maintaining and consolidating the independence and territorial integrity of the newly independent countries of Central Asia and the Caucasus,” declares Iran’s Foreign Minister Ali Akbar Velayati.

“With the materialization of this project (rail link), Iran has taken a great leap forward in opening a new window to the outside world for Central Asia and the Caucasus,” he adds.

The rail link has since preoccupied Iran’s leaders and the media who point out that Iran could become a vital link in a future rail- driven trade route between Europe and Asia.

Endorsing Teheran’s initiative, the Silk Road Assembly in the Chinese city of Xian a few months ago, praised Iran’s efforts to revive the ancient trade route between East and West by building this railway, and accepted Iran’s offer to hold next year’s Assembly.

According to Kaveh Basmenji, Editor-in-Chief of the Transport Industry Monthly published from Teheran, the rail link is the quickest route for the Central Asian republics to export and import goods.

“Everything depends on how the Iranians manage this link and how they take advantage of this unique situation to quickly move cargo between the Persian Gulf and Central Asian states” he says. “The issue is time. If goods could be moved fast, then there’s economic justification to use the line,” he adds.

However, Basmenji says there is still a need to streamline customs and other official trade procedures which can delay the movement of goods at the border.

Low capacity commercial operations have already begun across the border. The Ministry of Roads and Transport estimates that 2 million tonnes of cargo and 500,000 passengers will be carried during the first year of operations.

Eventually, with the installation of modern machinery, the goods carrying capacity is expected to increase fourfold and an additional half a million passengers can be transported annually.

Newspapers here quoted the head of the neighbouring Kazakhstan railways, Khodaygholi Khalikof saying that Kazakhstan and Russia will be heavy users of this railway, once the modernisation works are complete. Kazakhstan will save 10 million dollars a year by using the line, he is reported saying.

Transport journalist Basmenji has calculated that Iran will earn about 70 million US dollars each year from the rail line during its initial phase. Once it is running at full capacity, the profits can increase four times, he adds.

The Iranian government is developing a Free Trade and Industrial Zone at the border town of Sarakhs under the supervision of the Astane Qodse Razavi(AQR) – an Islamic consortium headed by the influential Ayatollah Vaez Tabasi.

An area of more than 5,200 hectares is being developed by the AQR which is pumping in 100 billion rials (about 3.5 million dollars). An international airport has already been built nearby. A 240-room hotel is also on the drawing board. The consortium expects to generate 25,000 jobs.

The Iranian Government has meanwhile signed several agreements with its northern neighbours, mainly Turkmenistan and Kazakhstan, to harness their abundant natural gas and oil resources. These

include construction of pipelines to transport gas to third countries and oil swaps.

Analysts here say that the Mashhad to Tajan line can help Iran resist Western attempts to isolate it diplomatically and economically. With the rail link opening up the possibility of an eventual connection between Europe and Asia, Teheran will become too important for Europe to ignore.

But they caution against expecting too much. “If the rail link is properly managed it can absorb a good part of the cargo traffic (between Asia and Europe). But, the main significance for the time being is the connection between the Central Asian republics and warm water ports (in Iran),” says Basmenji.

As it is, Iran’s railway is not known for its efficiency and more than 80 percent of the country’s goods and passenger traffic is carried by road, according to the Transport and Terminals Organisation of Iran.