Russia to finance Electrification of Iran’s Garmsar-Incheh Borun Railway project

Iran makes a USD 3.7 billion rail offer to Russia. Technical and Infrastructural Deputy CEO of the Islamic Republic of Iran Railways Mazyar Yazdani said that Garmsar-Incheh Borun Railway project will be electrified using Russian finance at €1.2 billion.

TEHRAN: Garmsar-Incheh Borun Railway project will be electrified in a period of four years, Mazyar Yazdani said. The inaugural ceremony for launching electrification of Garmsar-Incheh Borun Railway project is held at the venue of the Islamic Republic of Iran Railways in the presence of distinguished Iranian and Russian officials. The financial resources of this rail project will be provided by Russia using $1.2 billion finance scheme, he observed. Garmsar-Incheh Borun rail line is located at Iranian transit route from Kazakhstan, Turkmenistan and Amirabad Port, he said, adding, “moreover promoting transit capacity, operation of this giant rail project will play an important role in transport of passengers.”

Once this contract is finalized, not only rail transport situation will be improved, but also rail transit capacity is also increased, he reiterated. He put the length of Garmsar-Incheh Borun railway at about 430 km, more than 200 km of which is located in mountainous region. He pointed to the salient specification of this rail project as follows: increasing cargo transport capacity, reducing noise and environmental pollution as well as decreasing liquid fuel consumption rate.

Iran has also proposed railway electrification projects worth USD 3.7 billion to Russia, RZD’s First Vice-President Alexander Misharin announced. The projects include electrifying 3,000 kilometers of lines in Iran which is on an ambitious railway expansion and modernisation plan. Sinomach company (China National Machinery Industry Corporation) signed a contract worth CNY 5.35 billion (USD 851.7 million) to build a new rail line in western Iran.

”Three-thousand kilometers, a big project. We agreed to negotiate this offer. This is a big project, we need to fold the financing scheme, we are talking about projects worth EUR 2-3 billion,” Misharin told Russia’s Sputnik news agency. ”Indeed we signed a contract for the electrification of the Garmsar-Sari-Gorgan-Incheh Borun line, and it includes, among other things, access to other lines,” Misharin said.

”Now we are considering what these connections will be. These will be the sections that are part of the North-South Corridor, maybe this will be Tehran-Tabriz rail line. This is the next stage of our discussion. The Iranian side proposed to expand our cooperation, we are ready to discuss it”, Russian Railways’ First Vice-President added.

We recall that in August 2017, a Russian bank agreed to provide EUR 1 billion to electrify the 500 km Garmsar-Ince Burun line in northeast Iran. The name of the Russian bank was not disclosed. The railway stretches to Turkmenistan and Kazakhstan, linking Central Asia to the Persian Gulf and beyond.

Russian Railways said that the project will start in 2018. The contract covers the design, the sourcing of materials and the equipment and construction of stations and tunnels, traction substations, section pillars and the power supply center. RZD also announced readiness to electrify the 600 km railway route between Tehran and the northwestern city of Tabriz, which is also eyed by Germany and Italy.

We also recall that in July 2017, the Industrial Development and Renovation Organization (IDRO) in Iran signed a EUR 2.5 billion contract with Russia’s most prominent  rolling stock manufacturer, Transmashholding,  for the joint production of rolling stock in Iran. Based on the contract, a joint venture will be formed between IDRO and the Russian company, with the Russian side holding an 80% stake and the Iranian side 20%.