Kazakhstan, Iran & Turkmenistan Agreed to Boost Cargo Volume via Railroad

Officials from Kazakhstan, Iran, and Turkmenistan have signed a trilateral memorandum of understanding (MoU) to expand their railroad cooperation in order to boost cargo volume between the three Caspian littoral states.

The rail cooperation document was inked as part of the Business Forum held on the sidelines of the 15th Economic Cooperation Organization (ECO) Summit in Turkmenistan's capital Ashgabat last week. It reportedly aims to increase freight traffic from Kazakhstan to Turkmenistan and further to Iran.

The memorandum was signed following the agreement reached between the Head of the Islamic Republic of Iran Railways (RAI) Miad Salehi and the Head of Turkmen state-run Railway Agency Azat Atamuradov a month ago.

According to the new memorandum, a joint working group should be formed among three countries to implement the set goals and increase the cargo passing through this transit route. Salehi believes that all member countries will benefit from the new document since it can boost transportation through the North-South corridor.

The three Caspian region countries are linked via the 917.5 km (570 mi) Kazakhstan-Turkmenistan-Iran railway launched in 2014. Being part of the North-South international transport corridor, the railway connects Ozen in energy-rich western Kazakhstan with Bereket - Etrek in Turkmenistan and ends in Gorgan in northeastern Iran. In Iran, the railway is linked to the national network, making its way to the ports of the Persian Gulf and Turkey. The $620-million project was jointly funded by the governments of Kazakhstan, Turkmenistan, Iran, and the Asian Development Bank.

The volume of cargo transit between Iran, Kazakhstan, and Turkmenistan has increased since the launch of the Kazakhstan-Turkmenistan-Iran railway. The line had an initial capacity of five million tons per year. The volume of trade turnover on the railway reached 272,960 tons in the first quarter of 2020.

Turkmenistan imports vegetables, fruits, construction materials, and metal products from Iran. Iran mainly imports oil products and textile goods from Turkmenistan. Kazakhstan is a major grain producer supplying both Turkmenistan and Iran. The Kazakhstan-Turkmenistan-Iran railway has speeded up the shipments along the route and helped raise the amount of grain Kazakhstan sells to Turkmenistan and Iran.

The International North-South Transport Corridor (INSTC) is a 7,200 km long multi-modal network of ship, rail, and road routes to transport freight between India, Iran, Azerbaijan, Armenia, Russia, Afghanistan, Central Asia, and Europe.

The objective of the corridor is to increase trade connectivity between major cities such as Mumbai, Moscow, Baku, Astrakhan, Tehran, Bandar Abbas, and Bandar Anzali. The aim of the corridor is not just to increase trade between member countries but also to standardize tariffs and customs duties.