EghtesadOnline: Close to 47 million tons of cargo have been transported via railroad in Iran during the previous Iranian fiscal year (started March 21, 2017), which indicates a 17.5% increase compared with the similar period of last year, the CEO of Islamic Republic of Iran Railways announced.
The volume has already gone beyond the record high of 40.3 million tons of cargo transported via rail in Iran last year (March 2016-17).
“Rail transit from Iran has reached around1.6 million tons by March 13, 2018, registering a 45.5% rise compared with the corresponding period of last year,” Saeed Mohammadzadeh was also quoted as saying by IRNA.
The official added that the transportation of each ton-kilometer of cargo via railroad saves up to 1.3 cents in fuel consumption (compared to road transportation), which indicates the efficiency of transferring cargo transportation from road to railroad, according to Financial Tribune.
The Iranian government has placed expansion of Iran’s rail sector on top of its agenda to facilitate transportation, preserve hydrocarbon fuels and reduce air pollution.
Iran’s Sixth Five-Year Development Plan (March 2017-22) has tasked the government with increasing the share of rail in cargo transportation from the current 12% to 30% by the end of the plan.
IRIR and the Construction and Development of Transportation Infrastructure Company, both affiliated with the Ministry of Roads and Urban Development, have laid tracks for 1,300 kilometers of railroads so far in the current year (ending March 20), which is a record high over the past 90 years.
Mohammadzadeh added that around 7 million passengers have travelled via railroads in the country so far this year, which shows a 6% increase year-on-year.
The share of rail in passenger transportation is expected to increase to at least 20%.
Considering the big subsidies paid to the rail passenger transportation sector, according to the IRIR chief, Iranian railroad’s earning from passenger transport is insignificant.
Boosting Rail Fleet
Apart from increasing the length of Iran’s railroad, the government has recently stepped up efforts to procure new rolling stock to expand its rail fleet.
The Industrial Development and Renovation Organization signed a €2.5 billion contract with Russia’s CJSC Transmashholding last year for the joint production of rolling stock in Iran.
French company Alstom has also entered a joint venture with two Iranian companies to manufacture 1,000 subway wagons in three years. The French multinational company signed a trilateral “shareholders agreement” with IDRO and Iranian Rail Industries Development Company in Tehran on July 23 last year to manufacture the wagons at IRICO’s facilities.
South Korean rolling stock manufacturer Hyundai Rotem signed a contract worth €720 million with the Islamic Republic of Iran Railways on December 2 to produce 450 suburban railbus wagons in Iran.
Earlier this month, a contract was signed between the Industrial Development and Renovation Organization of Iran and CRRC Nanjing Puzhen Company, a Chinese railroad rolling stock manufacturer, for the design, procurement, supply, manufacture and delivery of 450 subway wagons for the Iranian cities of Ahvaz, Shiraz and Tabriz.
Another contract was signed on the same day between Iran’s Construction and Development of Transportation Infrastructures Company and Sinoconst China Machinery Industry Construction Group INC for the construction of Section-1 of the 446-km-long Shiraz-Bushehr Railroad that covers 250 km of the whole route.
And more recently, China Railway Rolling Stock Corporation Changchun Railway Company (CRRC CRC) and Tehran Wagon Company won the tender to build and supply 630 cars for Tehran’s Subway last week. The project is worth more than €782.66 million and will be financed by the Chinese side.
China has been a major player in Iran’s rail sector.
A Giant Crossroads
In addition to getting its own people and goods moving, Iran is eager to come into its own as a great hub linking Europe, Asia and Africa.
Making Iran a giant crossroads are two grand trade routes involving the Pacific, Indian and Atlantic oceans. One is the International North-South Transport Corridor and the other is China-Europe Silk Road.
The idea behind INSTC is that containerized goods will travel from the Mumbai Port in India to Iran’s Persian Gulf coast–bypassing Pakistan–from where they will be able to reach Moscow and Europe in half the time taken by the Suez Canal.
Apart from saving time, the route has been estimated to save $2,500 for every 15 tons of cargo.
Iran, Russia and India signed a convention initiating the INSTC way back in 2000.
The other axis of the crossroads is China’s Silk Road, arguably the infrastructure project with the highest priority of all in Beijing.
A high-speed standard gauge line running through Central Asia would slice through a knot of broad gauge lines in the states of the former Soviet Union and speed up the flow of goods to Europe, compared to sailing round the long way.
So, the stakes of Iran’s rail schemes are high, both for the Iranian economy and for the whole of Asia, as it reconfigures itself for the 21st century.