Wednesday, 19 September, 2018

US Sanctions Will Not Affect Russia-Iran Railway Cooperation

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Hossein Ashouri, deputy director of the Islamic Republic of Iran Railways, told Sputnik how the sanctions imposed on Russia and Iran would affect the relations between the countries, as well as the potential of bilateral cooperation in the construction and maintenance of Iran’s railways.

According to Abbas Akhundi, Iran’s minister of roads and urban development, last December, Iran and Russia signed a contract for the production of railcars. Earlier, the Iranian media reported that the United Wagon Company and three Iranian companies had agreed to supply the country with railcars. It was planned that the Iranian companies would produce the cars’ bodies, and the UWC would supply the wheels and braking systems.

Hossein Ashouri, deputy director of the Islamic Republic of Iran Railways, says that the US sanctions will never affect Iran’s railway cooperation with Russia, and its contacts will continue expanding. He also noted that the previous sanctions weren’t able to affect the countries’ cooperation in the field of railway construction.

According to Ashouri, contractors and specialists from both counties take part in joint projects. Since the commissioning is carried out by Russian specialists, equipment is also provided by the Russian side in accordance with their agreements: “Both Iranian and foreign specialists are involved in the projects carried out with the participation of foreign companies. In accordance with the arrangements for the project, Russia’s responsible for the project finance, however, both Iranian and Russian contractors and specialists take part in the project. In some places, the ratio of Iranian and Russian specialists is 50% — 50%, and in some it’s 30% — 70%.” The projects allow for both the domestic and foreign potential of the companies to be used.

The Russian side is also responsible for the provision of equipment and spare parts. Ashouri says there’s no difference between Russian or any other foreign equipment, since all the companies are functioning in keeping with international standards: “As Russia’s responsible for the financial side of the project, then the equipment must also be supplied by this party. We don’t seek any advantages of Russian equipment over foreign equipment. If we had signed a contract with another country, we would’ve bought the equipment there.”

According to Ashouri, the contract for the production of 6,000 railcars says that the Russian side should provide the financial aspect of the project.

“The contract says that Russian factories will manufacture some of the railcars and spare parts, and three Iranian car manufacturing companies will do that in Iran. It is not the IRIR that is the buyer, it’s the Iranian private companies. The IRIR is the guarantor of payment,” Ashouri explained.

As for the agreement on the electrification of the Garmsar-Inche-Burun district, Iran will also need Russian spare parts: “We’ll need various spare parts after the district’s electrification to maintain the railways, since Iran lacks resources to do that.”

As part of the agreement on the electrification of Garsar-Ince-Burun, the countries also agreed on the implementation of several more joint projects, such as the launch of the Khaf-Kashmar double-track railway, as well as the electrification of Sarakhs-Bandar-Abbas. At the moment, the parties are expected to hold negotiations to sign the necessary contracts.

Ashouri also stressed that the railway cooperation between Russia and Iran would develop despite the sanctions: “In recent years, Russia has been under international sanctions. However, even during the sanctions period, Iran had no problems with railway cooperation with Russia. Now when some new restrictions have been introduced, I’m sure they won’t affect our cooperation in any way.”

IRIR’s deputy director also stressed the importance of International North–South Transport Corridor in the countries’ trade relations. Preliminary studies show that the corridor’s capacity is over 7,000 tons of goods per year, and it still has far to go: “Over the past 14-15 years, there has been much talk on the North-South Transport Corridor. One of the problems with the corridor’s launch is that there’s no railway service along the Qazvin-Rasht-Astara route. For several years we’ve been trying to establish service along Kazvin-Resht and Astara-Astara (Iran-Azerbaijan). Last year we finished the construction of the Astara-Astara district, and this year we’re going to launch the Kazvin-Rasht. We still have the Resht-Astara section, which is 167 km long, and which is financed by Azerbaijan. In 304 years it will be launched as well.”

According to Ashouri, there was a trial cargo shipment from India to Qazvin (rail), Qazvin to Astara (by truck) and Astara to Moscow (railway). At the moment, the shipment costs are being negotiated. The three sides have also agreed to reduce duties in order to increase the attractiveness of cargo transportation along this route.

Ashouri noted that the railways are meant primarily for freight traffic, but there’s also the possibility of passenger transportation: “During the Soviet times, there were trains going from Tehran to Moscow through Julfa. After the collapse of the Soviet Union, the railway service ceased. However, there’s a chance to once again launch the Tehran-Moscow train, but, in general, we’re talking about the countries’ cooperation in the field of cargo transportation.”

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