Chabahar-Zahedan railway project requires private sector’s contribution

Connecting the ports to the railway network is an issue seriously emphasized and followed up by Iran over the recent years, as the country is strongly pursuing the objective of boosting exports and transit via its ports.

Chabahar Port in southeast Iran is the most prioritized one for railway connection as the port’s exemption from the new round of the U.S. sanctions on the country is an opportunity for development of export, transit, and also transshipment.

Lying on the coast of the Gulf of Oman in Iran’s southeastern Sistan-Baluchestan Province, Chabahar is the country’s only oceanic port and given its strategic location in the International North-South Transport Corridor (INSTC) development of the port is of high significance for Iran.

The project for building a railroad connecting Chabahar to Zahedan (capital city of Sistan-Baluchestan Province) is planned to be completed by the end of the Iranian calendar year of 1400 (March 2022).

Last week, Iranian First Vice President Es’haq Jahangiri announced that Supreme Leader Ayatollah Seyed Ali Khamenei has agreed with withdrawing $300 million from the National Development Fund (NDF) for Chabahar-Zahedan railway project.

The official said that the government attaches high importance to the development of Makran (a semi-desert coastal strip along the coast of the Gulf of Oman).

He stressed that the government is making every effort to implement and complete the projects in Makran and in this due Transport Ministry is working hard on Chabahar-Zahedan railway project.

Completing Chabahar-Zahedan railway projects has become more necessary since inauguration of the first development phase of Shahid Beheshti Port (an extension to Chabahar Port) in December 2017, which tripled the port’s annual shipment capacity to 8.5 million tons.

In an interview conducted by Hamshahri Newspaper last week, Mansour Bijar, the deputy governor general of Sistan-Baluchestan for development affairs, stressed the need for expediting implementation of the railway project considering development of Shahid Beheshti Port and more cargo loading and unloading in this port.

The project for building the 610-kilometer railroad was launched nine years ago but due to lack of financial resources it was stopped for three years. Then the contractor of the project was replaced and the operation was started, but after passing four years of implementation it has only 40 percent progress, again due to lack of budget.

Now, the government being authorize to withdraw $300 million from the National Development Fund for this project is a promising step to expedite its implementation, but the officials say that the project requires 40 trillion rials (about $952.3 million) to be complete and given all other factors into consideration more contribution seems necessary.

In an interview conducted by the news portal of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) and published on the website of ICCIMA on Sunday, Bahram Amir-Ahmadian, a professor of political geography at University of Tehran, said completing Chabahar-Zahedan railway project by the year of 1400 seems somehow optimistic considering the current condition.

The political expert believes that the government should attract the private sector’s investment and contribution to the project.

Chabahar-Zahedan railway is a project to bring profit in long-term, so the government should inform the private sector about its significance and create the ground for this sector’s presence in the project, he noted.

“It is not a project for which we wait for the foreign investment, while we should refer to the domestic resources”, the expert concluded.