It is estimated that the new railway, Southern Armenia Railway – linking Iran and Armenia – will have 316 kilometres of simple electrified track. The railway will provide a connection between the town of Gavar, near Sevan Lake and the town of Meghri, in the south, located at the border with Iran. The implementation of the new project indicates Armenia’s decision of leaving the isolation which has actually been imposed to the country, but also Iran’s ambition to develop a series of railway projects on its territory and to have access to adjacent markets.
The Armenian and Iranian governments officially approved the railway project in 2009, but they were confronted with the problem of finding concrete financing sources for the railway that would cross most of the Armenian territory. According to an informal estimation, the project would need between USD 1 and 4 Billion.
Vladimir Yakunin insisted on the feasibility of the project although the return of the massive investments, necessary to the development of the railway, could take between 30 and 50 years. “If the project is launched, South Caucasus Railway will de-finitely participate in its implementation”, added Yakunin, referring to RZD’s subsidiary in Armenia.
After searching for reliable financing sources, such as potential investors and companies from Russia and China, the agreement has been signed with an Arab company, based in Dubai (UAE).
According to gulfnews.com, Rasia FZE, a company based in Dubai, has signed with Armenia and Iran a third party agreement on building the Southern Armenia Railway. The Memorandum of Understanding signed by the three parties includes another project, the development of a road high-speed connection, the cost of the two projects, railway and road, amounting to USD 3 Billion. The project will be developed based on a public-private partnership and the new line will be operated by South Caucasus Railway.
The line will be integrated in the core railway system of Armenia, as well as the link to the operation system in Iran which mostly has a standard 1435 mm gauge. Southern Armenia Railway will be a significant part of the North-South Corridor which will link the Persian Gulf to the Black Sea.
Russia continues to remain interested in the ambitious project which concerns the construction of a connection railway between Armenia and Iran despite some “issues” generated by the differences between the government in Tehran and the Western region, declared the head of the Russian Railways Vladimir Yakunin.
“We think that this project has realistic chances of implementation but that could be done only within the inter-state framework and doesn’t depend only on us,” Vladimir Yakunin said last year at end of a visit in Armenia. “One of the most important objectives of South Caucasus Railway is the integration in the transport system on the Europe-Asia axis, and this will be achieved through the company’s development at national level, the implementation of infrastructure projects both at national and international level, as well as the efficiency and the increase of the quality of transport services”, declared Victor Rebets, CEO South Caucasus Railways, at the Railway Investment Summit in the Wider Black Sea Area 2012 – Railway Days, organised by Club Feroviar and AIF in October 2012.
At the beginning of the year, Armenian experts said that Iran-Armenia freight transit would be profitable if the volume of freight between the two countries exceeds 3.5 million tonnes per year. Currently, the freight volume carried through the southern border of Armenia with Iran doesn’t exceed 640,000 tonnes.
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