The new branch will resume rail traffic between Russia and Iran, which came to an end fourteen years ago. According to Gennady Fadeyev, Russian Railways president and head the Russian delegation at the talks, as freight and passengers will spend less time on the move (gaining between 5 and 14 days), the land route will become a rival for the Caspian ferry services on the North-South route. However, the amount of cargo expected in the future is so great that it will be enough for all the concerned parties. Present commodity flows are estimated at 15 million tonnes a year, with future forecasts putting them at 20 million tonnes and over. According to Russian experts, the annual export and transit turnover via the border station Astara will reach 10 million tonnes in the next few years.
Iran's deputy road and transport minister, Mohammad Saidnejad, who is also director general of the country's railways and is attending the negotiations, recalled that bilateral turnover for the USSR and Iran had been three million tonnes. The rail system towards the USSR carried up to one-sixth of all Iran's foreign trade before 1990. "The present international project benefits every member country," the Iranian official noted. He expressed his confidence that the reopening of railways would become further proof of the growing economic co-operation between Iran and Russia. Significantly, practical implementation of the project to build the new branch is beginning ahead of a visit to Iran to be made by Russian President Vladimir Putin.
Arif Askerov, head of Azerbaijan's state railways, said that Azerbaijan is already participating in several international corridors. Baku, as a member of the international TRASEKA transport project, which retraces the ancient Silk Road from Central Asia to Europe via Turkey, is now considering joining the agreement on the North-South international transport corridor.
The Azerbaijani delegation holds the view that the project to build a rail link currently being discussed in Moscow is extremely important, because it re-establishes rail links between Baku and Tehran, gives Azerbaijani exports an outlet to South Asia and promises considerable economic benefits from cargo and passenger transit.
All the design documentation to build the Kazvin-Resht-Astara branch has already been prepared by the Iranian firm Metra, with the assistance of Japanese specialists. The project's estimated cost has been put at $170 million.
According to Fadeyev, Europe is closely monitoring the progress of the North-South corridor project. Germany, for example, is ready to ship up to six million tonnes of container cargo along it, while Finland is looking to low-cost and rapid delivery of its paper and other exports to Iran and India.
As far as the North-South route's economic advantages are concerned, then it currently costs $5,670 to transport one 40-foot cargo container from Frankfurt am Main to South Asia via the Suez Canal. The North-South corridor can already trim two thousand off the price and 15 to 20 days.
Fadeyev emphasised that Russia was taking an active part in implementing the North-South corridor. On the Caspian it has commissioned a ferry service in the port of Makhachkala, which is ready to start functioning. Work will soon be finished on linking up the port of Olya to Russia's railways. Indeed, although this is planned only for this August, Olya is already handling up to 0.9 million tonnes of exports and transit goods a year. The port's capacity will reach four million tonnes in 2005, and is expected to grow to eight million tonnes by 2010. It already has the facilities to handle 200,000 tonnes from Ro-Ro vessels and up to 0.5 million tonnes of general cargo, the first phase of a container terminal able to handle 0.4 million tonnes (with another half a million to be added in 2005), and started work to build a grain terminal. A decision has already been taken, moreover, to send a direct container train along the Europe-Olya-Bender Abbas-Mumbai route this August to demonstrate the advantages of the North-South corridor, compared with alternative sea routes. At the end of the summer, there are plans to organise the first trial run of the Moscow-Tehran passenger train.
The Russian capital is discussing plans to set up an international consortium to build the Iran-Azerbaijan-Russia rail link and exploit this direction. But it is already clear that for Russia the resumption of railway traffic with Iran and transit from Europe to the South Asian subcontinent will mean not only developing the economy and infrastructure of the Southern Federal District, but also promoting Russian technology, equipment and innovations in the railway sphere.