Monday, June 22 2015 14:16

 The Iran-Armenia railway and motorway are two unrelated projects, First Deputy Minister of Transport and Communications of Armenia Arthur Arakelyan said in the parliament on June 22 in response to the question by MP Tevan Poghosyan as to whether the railway is necessary considering that a motorway connecting the two countries is currently being built. 

The deputy minister is sure that both the projects look to improve the quality of infrastructures and regional cooperation. He recalled the recent statement by Vladimir Yakunin, Russian Railways CEO, who called the project unpromising and the explanations of the Russian Railways that followed Yakunin's remarks immediately.  Arthur Arakelyan said Armenia will soon announce the measures to be implemented under the project.    "The given project is very important to Armenia, chiefly given that the sanctions against Armenia's friendly neighbor Iran have been partially rescinded," he said. The deputy minister said the project is likely to be implemented on private investments.

 However, only after all sanctions against Iran are rescinded, the project will be efficient. The deputy minister explained that the construction activities in the mountainous areas will require engineering solutions and big investments. 

Earlier, president of Russian Railways Vladimir Yakunin told ArmInfo that the Armenia-Iran railway is absolutely unpromising: "it is like opening a window to nowhere, to the wall of the neighboring building."  

The Russian Railways came out with a statement immediately after Yakunin's remarks saying, "From the geopolitical perspective, the Iran-Armenia railway construction project is of big strategic importance to Armenia in the light of Armenia's transport infrastructure integration into the Eurasian and international transport system."

In the meantime, the statement says that given the tangible expenses and the long recovery period that make such projects less attractive for the business, the implementation of the projects becomes difficult without the state support. 

"The Russian and world practices demonstrate that the state support for the strategic infrastructure projects creates a multiplier effect for industry and is of much importance to sustainable development of economy in general," says the Russian Railways.    

Armenia and Iran signed a concession agreement in May 2012. In cooperation with Dubai-based investment company, Rasia FZE, a feasibility study of the Southern Railway project was developed. It is anticipated that the construction will take 6 years. The feasibility study of the project Southern Railway of Armenia (Iran-Armenia railway) is ready.

The railway is supposed to connect Asia with Central Europe.  It will be 305 km long and will consist of 86 bridges and 60 tunnels. The estimated cost of the project is $3.5bn.

The construction will be launched in 2016 and finished in 2022.  It is anticipated that the annual freight activity on the railway route from Gagarin Station (Gegharkunik region) to Agarak (Syunik region) will total 25 million tons. This route is by 44 shorter than the earlier planned railway section Gavar-Agarak.  It will be linked to the operating railway network. The launch of the Southern Railway of Armenia and Southern Highway of Armenia was announced in Jan 2013. Then a trilateral Memorandum of Understanding was signed by the South Caucasus  Railway of Armenia, Ministry of Transport and Communications of Armenia and Rasia FZE. 

According to ArmInfo's economic analysts, there are three factors that make the project inefficient. First, the Armenian railway cannot have direct access to Russia. Second, even if there is a hypothetical possibility that the Abhkazian section of the railway will be reactivated in future, the Iran-Armenian motorway that will have been built by that time will make the Iran-Armenia railway absolutely unnecessary in view of its short mileage.  The third, most important factor is the Astara-Resht-Kazvin railway project implemented by the Russian Railways to link the operating railways of Russia, Azerbaijan, and Iran. That project is part of the North-South international transport corridor that will integrate the transport routes and information highways of Russia, Azerbaijan, Iran, India and Oman. The analysts say the Iran-Armenia project is politically motivated.

Therefore, the sides have not managed to set it in motion within the last 3 years.  The statements by Armenian officials claiming that China may invest in the project as part of its ambitions plan to restore the great Silk Road (cost $40 billion) do not stand up to criticism either. Armenia is not mentioned in any of the new Silk Road scenarios, unlike the Iran-Azerbaijan and Turkey-Georgia railways.  Relatively recently, the transport minister of Iran voiced quite promising projects of railway communication with the countries in the region, but Armenia was not mentioned in any of those projects.