Iran has geostrategic position along international transport corridors and it can have a major role in promoting regional connectivity to benefit from huge advantages of transit. Iran transport diplomacy is heading to that direction though with slow pace.
The main corridors which involve Iran's territory are International North-South Transport Corridor (INSTC), East West Transport Corridor i.e. Transport Corridor Europe Caucasus Asia (TRACECA), Chinese Belt and Road Initiative (BRI), Islamabad-Tehran-Istanbul (ITI) as part of ECO corridor, Kazakhstan-Turkmenistan-Iran Railway Corridor (KTI), and the road route of the Persian Gulf-Black Sea International transport and Transit Corridor.
The following text attempts to clarify Iran's recent position within these corridors and elucidate Iran's solutions and stances to advance its transport diplomacy.
International North-South Transport Corridor (INSTC)
International North-South Transport Corridor (INSTC) as a multi-modal transport project was initiated in 2002 by India, Russia, and Iran with the aim of increasing transport and trade cooperation. It is 7200 km long and links the India Ocean to Russia and Europe through the Persia Gulf, Caspian Sea, and Central Asia. It can also extend to the Baltic, Nordic, and Arctic regions.
The corridor is considerably economical and competitive compared to the classic route through Suez Canal as it shortens the distance by half and the costs by 30 percent. In 2012, other member states including Azerbaijan, Armenia, Kazakhstan, Belarus, Tajikistan, Kyrgyzstan, Oman, Syria, Turke5y, Ukraine, and Bulgaria (as observer) joined the Corridor.
Iran's position within INSTC is particularly important due to Chabahar Port as the only ocean port in Iran through which it can have direct access to the Indian Ocean. India has had investments in Chabahar Port which would counterbalance China investments in Gwadar Port as part of advancing China-Pakistan Economic Corridor (CPEC) and surpassing Pakistan for accessing Afghanistan, Central Asia, and Russia for its commercial transactions. However, Iran's approach is not based on competition but rather cooperation and it welcomes foreign investments.
Iran has two main projects that can optimize and put INSTC into full operation. The main project, as the missing link along the INSTC, is Rasht-Astara Railroad which is 162 km long and once finished can facilitate transactions between northern and southern ports through railway.
Another project is Chabahar-Zahedan-Sarakhs Railroad that adds the final touch to the Eastern transport corridor within Iran. The railroad link which is part of trilateral Iran-India-Afghanistan Agreement connects Chabahar to Zahedan and further to Sarakhs in the northeast of Iran. The project is 1350 km that the first strategic phase from Chabahar to Zahedan is 730 km with currently 56 percent development.
India's Minister of External Affairs has recently proposed to include Chabahar within INSTC. This is while, according to the head of Iran Ports and Maritime Organization (PMO), the Indians are going to invest $300 million in rail development along this route.
Chabahar Port has currently 8.5 million tons loading/unloading capacity that in recent years is doubled. So, development of the infrastructures and equipment are very vital for increasing the output of the Shahid Beheshti Port as the only ocean port of Iran.
Belt and Road Initiative (BRI)
China's Belt and Road Initiative (BRI) which originally had been named "New Silk Road" is basically a transcontinental long-term policy and investment program which aims at policy coordination, infrastructural connectivity, increased trade, and acceleration of financial and economic integration of the countries along the route of the historic Silk Road.
The initiative was launched in 2013 and by 2016 it was known as One Belt, One Road (OBOR). It is leading toward forming a new china-centric world order.
BRI intends to promote connectivity of Asian, European and African Continents and their adjacent seas and strengthen partnerships and connectivity networks among the countries along the Belt and Road.
BRI is a global initiative but basically due to the revival of historic Silk Road, it puts a major focus on countries in Asia, Eastern Africa, Eastern Europe and the Middle East, a region mainly composed of emerging markets. According to the Belt and Road portal, currently 71 countries are taking part in the Initiative, together representing more than a third of the world's GDP and two thirds of the world’s population.
BRI has three initiatives including: 1) the (land based) Silk Road Economic Belt as a long-term vision for the infrastructural development, connectivity and economic cooperation of Eurasia. It is spanning six development “corridors”, namely: New Eurasian Land Bridge Economic Corridor (NELBEC), China– Mongolia–Russia Economic Corridor (CMREC), China–Central Asia–West Asia Economic Corridor (CCWAEC), China–Indochina Peninsula Economic Corridor (CICPEC), Bangladesh–China–India–Myanmar Economic Corridor (BCIMEC), and China–Pakistan Economic Corridor (CPEC), and 2) the 21st Century Maritime Silk Road that connects China to Southeast Asia, Indonesia, India, the Arabian Peninsula, Somalia, Egypt and Europe, encompassing the South China Sea, Strait of Malacca, Indian Ocean, Gulf of Bengal, Arabian Sea, Persian Gulf and the Red Sea, and 3) the Polar Silk Road to advance China's Arctic strategy and its ambition to develop Polar Silk Road under the Belt and Road initiative.
China is following economic and security goals through its connectivity project of BRI. On one side, it connects itself to the west, and on the other side, it tries to control security of important regions.
Iran can have an important role particularly along China–Central Asia–West Asia Economic Corridor (CCWAEC) in the land-based Silk Road Economic Belt which as a main axis is an alternative to maritime transport between China-Iran-Europe.
The objective of CCWAEC is to interconnect the rail systems between the member countries of the Corridor including China, Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, Iran, and Turkey. CCWAEC’s route is from Ürümqi in Xingiang to Kazakhstan (Almaty), Kyrgyzstan (Bishkek), Tajikistan (Tashkent), Uzbekistan (Samarkand), Turkmenistan (Ashgabat), Iran (Tehran), to Turkey (Istanbul).
When CCWAEC is fully operational, shipping goods by train from eastern China through Iran can be done in half the time (13 days estimated) compared to the sea route.
This is an opportunity for Iran to take advantage of its geographical location as the best connectivity route along the corridors. For this end, Iran needs to focus on the key projects that has the highest output. As mentioned earlier and highlighted by Iran ambassador to Russia, Kazem Jalali, the main project is Rasht-Astara Railroad that will complete south-north rail network from Bandar Abbas to Astara at the northern border. Also completing Chabahar-Zahedan Railroad is equally strategic.
Additionally, development of the northern ports of Iran is really significant. This is expected to connect the Ports (including the Caspian, Amirabad, Anzali Ports) to the railway network in order to realize a multimodal network, and to equip the maritime fleet (e.g. deploying ro/ro ships). Currently, development of Amirabad Port is accelerating and operations in its adjacent port "Neka" has re-launched. According to the head of Iran Port and Maritime Organization (PMO), with 2,800,000 tons freight throughput, Amirabad Port has demonstrated 14 percent increase in loading/unloading capacity during last 9 months.
Moreover, the electrification of Tehran-Mashhad project and cross-border connectivity with neighboring countries like rail connection to Gwadar Port in Pakistan (200 km away from Chabahar) can extend the connectivity.
Other active international transport corridors are Islamabad-Tehran-Islamabad (ITI) rail corridor, Kazakhstan, Turkmenistan, Iran (KTI) Railway Corridor, and Persian Gulf-Black Sea International Transport and Transit Corridor which is a road transit route linking the Persian Gulf to the Black Sea.
Islamabad-Tehran-Istanbul (ITI) rail corridor as part of ECO corridor is already operational. Recently two freight trains resumed operation along ITI Corridor on 21 and 29 December 2021 respectively.
Istanbul–Tehran–Islamabad railway is about 6500 km of which 1990 km is in Pakistan's territory, 2603 km in Iran’s territory, and 1950 km within Turkey’s territory.
ECO train as the most effective mode of transport for freight transfer can play an important role in expanding commercial transactions between the member countries.
Compared to the maritime routes, the travel time for freight transfer along this route is estimated to be less than half (11.5 days estimated). The train can carry 20 to 40ft rail cars.
The route has been recognized as an international corridor by the United Nations.
Beyond connecting these three countries, the corridor is expected to form a link between Europe and Asia. As from Istanbul, there are connections to Europe.
On the other hand, India and Bangladesh have expressed interests to connect to the line, in order to realize a faster rail transport link to the Middle East and Europe.
Kazakhstan, Turkmenistan, Iran (KTI) Railway Corridor has already been constructed and was put in operation at the end of 2014. The inception meeting for the study project on commercialization of KTI Railway Corridor was held in 2019 in Tehran.
KTI as tripartite MoU on railroad cooperation had been renewed on the sidelines of the summit of ECO member states on 26 November 2021.
Due to the geopolitical privileges of Iran, this agreement on rail transport and transit will result in the increased rail transits through Kazakhstan and Turkmenistan to Iran. Further, it will expand operations through International North-South Transport Corridor (INSTC).
The possibilities of commercialization through railway transport are particularly important for Landlocked Developing Countries (LLDCs) because of the cost-effectiveness of railways in carrying heavy freights over long distances and in providing access to seaports.
Persian Gulf-Black Sea International Transport and Transit Corridor as a road transit route links the Persian Gulf to the Black Sea through Iran, Azerbaijan, and Georgia to the destination of Caucasus countries and East Europe.
It is among the key plank of connectivity programs attempted by Georgia, Azerbaijan and Iran.
A trial run crossing tripartite country to speed up traffic along the corridor was initiated by Iran in November 2021 and targeted transit-oriented convergence.
Boosting region-wide trade and transport through reinforcement of corridors is a priority of Iran’s Government, aiming to shorten transit routes and reduce transport costs.
Iran Transport Diplomacy in the current Government
Islamic Republic of Iran attempts to develop new alternative land routes instead of maritime route (via Suez Canal) for transit from East and Southeast Asia including China, India, and the Persian Gulf states to the Caucasus and Europe.
In road sector, 376-million-ton freights have been transported through road networks in Iran within the first nine months of the Iranian/Solar year of which share of road transit is 6.7 million tons demonstrating 109 percent increase compared to the same period in the last year. Iran is trying to increase road transit. In this sense, the number of fleet vehicles has already increased to 366,000.
In port sector, Iran's ports have already 266.3 million tons capacity and in the first nine months Iranian/Solar year, 109 million tons freights have been loaded and unloaded. Container throughputs at commercial ports are 1,491 TEU showing 9 percent increase.
In rail sector, within the first nine months Iranian/Solar year, 35-million-ton freights have been transported through rail network in Iran of which the share of rail transit is 1,390 tons with 202 percent increase.
Generally, share of road transit in freight transport is considerably higher compared to the rail transit (83 percent vs. 17 percent).
As part of its transport policy, Iran Ministry of Transport and Urban Development advance this transport diplomacy in relation with 15 neighboring countries. This is particularly evident in recent negotiations of the Ministry with Turkmenistan, Azerbaijan, Pakistan, Kyrgyzstan, Syria, Afghanistan and Iraq.
Iran and Turkmenistan negotiated during 16th meeting of Iran-Turkmenistan Joint Economic Cooperation Commission in October 2021 in which they agreed for doubling rail transit. Afterwards, on January 8, the Iranian Transport Minister met with Serdar Berdimuhamedov, Turkmenistan’s deputy chairman of the Cabinet of Ministers, to discuss bilateral transport and transit. Iran and Turkmenistan’s agreement for participation in trilateral agreement between Iran-India-Afghanistan in Chabahar Port would enable Turkmenistan to transit freights to northern countries. In 2021, commercial transactions between Iran and Turkmenistan demonstrated 84 percent increase.
Negotiations of Iran with Pakistan occurred amid 9th round of Joint Trade Committee (JTC) meeting with Abdul Razak Dawood, the advisor to the Prime Minister of the Islamic Republic of Pakistan on November 6. The two sides discussed facilitation of transit and economic transactions between Iran and Pakistan.
In November, Iran Minister of Transport and Urban Development, Rostam Ghasemi, met with Kyrgyzstan Minister of Economy and Commerce, Daniyar Amangeldiev, to confer transport and transit possibilities between Iran and Kyrgyzstan. Considering recent membership of Iran in Shanghai Cooperation Organization (SCO), Iran can use Kyrgyzstan as a Corridor to the countries in the SCO region and in the same way Kyrgyzstan can access eastern and southeastern countries via Iran.
Similarly, in November, heads of Iran and Azerbaijan Joint Economic Commission met to discuss joint infrastructural projects and bilateral economic relations. Rostam Ghasemi and Shahin Mustafayev agreed for construction of a bridge on Astarachay River, activation of Nakhchivan-Mashhad train, investments in Astara’s Terminal (Iran), and development of Persian Gulf-Black Sea international transport corridor.
In December, Iran and Iraq top officials met in Iraq and signed the agreement for Shalamcheh-Basra Railroad. The 32 km railroad links Iran's railway network to Iraq and will increase regional connectivity.
The most recent development in Iran-Afghanistan relations is the notification of the agreement for railway connectivity to the Transport Ministry on the part of Islamic republic of Iran's Government and Islamic Republic of Afghanistan. As per Article 123 of Iran's Constitution, this law provides necessary legal framework for launching rail services in freight and passenger transfer.
In January 2021, negotiations of Iran with Syria ran at the highest official level with President of Syria Bashar al-Assad, Prime Minister Hussein Arnous, and Foreign Minister Faisal Mekdad to form a joint bank that can facilitate construction projects and economic ties.
Considering current infrastructures and necessity of completing international transport chains, the future success of Iran's transport policy in the region depends on how far Iran advances a strategic and geostrategic approach in its transport diplomacy in order to take advantage of the opportunities.