Iran, Russia ink $1.6b deal to complete major transport network
Iran and Russia on Wednesday signed an agreement to undertake the construction of an Iranian railway line, marking the completion of the embryonic International North–South Transport Corridor (INSTC). President Ebrahim Raeisi and his Russian counterpart, Vladimir Putin, oversaw the signing ceremony via video-link, with the event taking place in Tehran.
The INSTC, a comprehensive transportation network encompassing maritime, rail, and road routes, spans a vast distance of approximately 7,200 kilometers, connecting Russia, Azerbaijan, Iran, and India.
Iranian Transport Minister Mehrdad Bazrpash and his Russian counterpart Vitaly Savelyev affixed their signatures to the deal, which carries a price tag of $1.6 billion. The agreement entails a collaborative effort between Russia and Iran in constructing the 164-kilometer railroad that connects the Astara border crossing, serving as the gateway between Iran and Azerbaijan, with the northern Iranian city of Rasht.
Raeisi told the signing ceremony that the INSTC will boost regional trade, saying, “Today, with the determination that exists... this big project is taking shape.”
He said there was “great potential” in ties with Russia, calling the latest agreement “an important strategic step on the path of cooperation” between Iran and Russia.
Putin praised the “obvious economic benefits” for both Moscow and Tehran in the form of new jobs and investments.
“The unique North-South transport artery, of which the Rasht-Astara railway will become a part, will help to significantly diversify global traffic flows,” Putin said.
The final segment of the INSTC is the Rasht-Astara railway, a pivotal component that Russia believes holds the potential to rival the Suez Canal as a prominent global trade route. The railway, running along the Caspian Sea coast, will facilitate the linkage between Russian ports situated along the Baltic Sea and Iranian ports located in the Sea of Oman and the Persian Gulf.
Bazrpash said the process of construction of the Rasht-Astara railway – the INSTC’s only missing link – “has started and we will finalize it within the next three years”.
Kremlin spokesman Dmitry Peskov said the transport corridor was “mutually beneficial” to all concerned states.