Transit Corridors Offer Iran New Opportunities for International Cooperation

Monday, June 22, 2015

Bahram Amir Ahmadian
Tehran University Professor & Eurasia Affairs Analyst

According to Iran's 20-Year Vision Plan, by 2025, the country will be one with the highest level of interaction with international community. When a country is able to take advantage of its geographical situation to interact with its neighbors as well as other countries at regional and global levels, and pave the way for regional contacts through its soil, then that country could be considered to have achieved its deserved geopolitical status.

There are a number of energy transmission pipelines that cross the Central Asia and Caucasus in order to export energy to global markets, but there is only one pipeline transferring gas from Turkmenistan to Turkey with an estimated capacity of 10 billion cubic meters of gas (part of which was consumed by Iran up to the last year). When it comes to Iran, there was limited oil swap with Turkmenistan through Caspian Sea (with a daily capacity of about 1.5 million barrels per day), which was canceled under Iran's previous administration, and there is also one instance of gas swap involving the Republic of Azerbaijan's autonomous region of Nakhichevan, which is carried out at a limited capacity. Apart from these, no energy transmission pipeline crosses through Iran to help boost geopolitical position of the country. Therefore, a review of networks that connect Iran to its neighboring countries will reveal the following points:

In 1996, Iran connected its railroad to Central Asia through a project known as Mashhad – Sarakhs – Tejen railroad. Later construction of a railroad connecting Iran's central city of Bafq to Mashhad further shortened this route. Of course, this route has been never taken advantage of at full capacity and the investment made in it has not probably returned. A glance at the process of goods transit through this route will attest to this fact. It was decided that passenger planes should also use this route, but this has not happened yet.

In 2003, Iran signed an agreement with Afghanistan, Turkmenistan, Tajikistan, and Uzbekistan to construct a road connecting Iran to Afghanistan and Central Asia.

Also, by taking part in a conference on the reconstruction of Afghanistan in the German capital city of Berlin in 2001, Iran promised to contribute USD 500 million to the reconstruction of its eastern neighbor. In line with this obligation, Iran built a first-grade paved road connecting Dogharoun border crossing to the Afghan city of Herat and gave it as a gift to the government of Afghanistan.

Iran is also planning to build a railroad connecting the southeastern Iranian port city of Chabahar to Mashhad in order to facilitate access by Afghanistan to city of Chabahar through which Kabul would also have access to free waters and, especially India, which is a strategic ally for Afghanistan. This road parallels another road that connects Chabahar to Mashhad and a large part of it has been made ready for operation. Such a network of roads can greatly help economic and social development of the country.

By connecting Zahedan-Quetta railroad to Iran's national rail grid, Pakistan has been also connected to Iran's national railroads. This project has been of great help to the promotion of the Economic Cooperation Organization’s goals. Now, it is possible to transport cargo and passenger from Pakistan to Europe through the Iranian soil.

Construction of the Qazvin-Rasht-Anzali-Astara railroad, whose Qazvin-Rasht section will become operational soon, is also underway to connect Iran's railroads to the Republic of Azerbaijan and Russia. Following the collapse of the former Union of Soviet Socialist Republics, the railroad that connected Iran's rail network to that of the Soviet Union was obliterated due to armed conflicts between the Republic of Azerbaijan and Armenia over the issue of Karabakh. In 1995, I took part in a conference on trade and economic potentials of Azerbaijan and in an address, proposed a connection between Iran's railroads and that of the Republic of Azerbaijan in the Azeri city of Astara because the country’s railroad extends up to the city of Astara across the Iranian border. The city is only 185 km from the Iranian border and when Iran's rail network connects to that of Azerbaijan, it can further continue to get connected to the national railroad of Russia. In 1996, and in a meeting with the then Iranian president, Akbar Hashemi Rafsanjani, the proposal was accepted by the Iranian government and a decision was made to go ahead with it. In 1999, preliminary studies and an initial survey were conducted on the plan. However, the plan was mothballed after that and no more measures were taken for its implementation. Now, after the lapse of about 10 years, Qazvin-Rasht railroad is expected to be inaugurated in the near future.

Iran – Turkmenistan – Kazakhstan railroad on the eastern side of Caspian Sea establishes Iran's rail connection to Kazakhstan and Russia despite obstacles created by the government of Uzbekistan in this regard. At the same time, it connects Iran's railroad to railroad networks in Central Asia and Russia, especially to Russian regions of Siberia and Baikal, and through those networks to China’s national railroad. This network became fully operational in 2014.

The North-South International Transport Corridor is supposed to replace the traditional maritime transport route that goes through the Indian Ocean toward Northern Europe. It is meant to create a land-sea corridor connecting Russia to Iran and India by crossing through Caspian Sea, Iran's soil and the northern part of the Indian Ocean. The agreement for building this part of the corridor was signed among Iran, Russia, and India in the Russian city of Saint Petersburg in 2000. The route is expected to make it possible for the three countries and other countries along its path to move more than 20 million tonnes of commodities per year. This route will reduce time and cost of goods transport by 30-40 percent compared to the traditional route. Unfortunately, this route has not been very active so far and it seems that Russia has designed this route mostly as a strategic choice. Therefore, after years of stagnation along this route, now that Russia is facing sanctions imposed on it by the Western countries, it has decided to activate this route. However, it is not difficult to understand that Russia’s need to Iran as a means of connection to other parts of the world is more than Iran's need to Russia. As a result, Iranian decision-makers and politicians should make plans in order to take concessions from Russia by taking advantage of this situation.

Apart from the route connecting Iran's Dogharoun border crossing to the Afghan city of Herat, which is an active and dynamic route used by both countries for basic purposes, other transport networks mentioned above have remained largely untapped or are not functioning at full capacity.

At present, in view of the ongoing crisis involving Russia and its western neighbor, Ukraine, and due to insecurity of the air corridor for European, Asian and oceanic flights over Ukraine and Russia, and also as a result of the European sanctions against Russia, air corridors crossing over Iran have emerged as preferable routes. Subsequently, the number of flights crossing Iran's air space has increased sixfold and this issue has greatly helped to uplift Iran's political position at international level.

On the other hand, due to the insecurity caused by the activities of the ISIS terrorist group in Iraq and Syria, transit of goods between Turkey and European, on the one hand, and Iraq, on the other, is currently carried out through Iran's route. During this period, the volume of goods transited through Iran has increased three times.

Since about 90 percent of Russia’s gas exports to Western Europe take place through Ukraine and about 40-50 percent of Europe’s imported gas is supplied through this route, disruption in transit of the Russian gas to Europe is quite possible and this issue has actually taken place several times in past years, facing European countries with a major problem. The main reasons that may cause this disruption include the current crisis between Ukraine and Russia as well as the economic and political sanctions imposed against Russia by the United States and the European Union, which cover Russian individuals, banks, finance and monetary institutions, in addition to the Russian government. Russia has so far swayed a monopoly on the European gas market and sees Iran – a country that possesses world’s second largest proven gas reserves – as its main rival. Therefore, Moscow has done its best to bar Iran's entry into the European gas market an instance of which was purchasing gas supply facilities of Armenia under the pretext of the Armenian government’s debt to Russia. However, the real purpose of Moscow’s measures was to prevent export of Iranian gas to Georgia through the Armenian gas pipeline in 2005. Iran must take advantage of this opportunity by encouraging European countries to invest in its gas reserves with the final goal of extraction and export of that gas to Europe. Fortunately, after a while, the Iranian government gave up its usual conservatism and caution about Russia’s interests, and the Ministry of Petroleum offered the European countries with some proposals in this regard.

The issue of the construction of the Peace Pipeline for the transfer of Iran's natural gas to India via Pakistan has been on the table for many years but to no avail. At the same time, Russia has frequently encouraged Iran to follow up on this project and its energy giant, Gazprom, has even offered Iran several times to invest and cooperate in the construction of the Peace Pipeline, in order for Russia to remain the sole source of gas supply in the European energy market.

Now, Iran is faced with a good opportunity to make the most of the current situation in Europe and the positive trend of the ongoing negotiations over Iran's nuclear program with the P5+1 group of countries. Therefore, Iran has to work seriously in the light of the aforesaid developments in order to regain its deserved position in the global energy market; a position which had been taken from Iran in the past few years.

Key Words: Iran, Transit Corridors, New Opportunities, International Cooperation, Transmission Pipelines, Central Asia, Caucasus, Energy, Global Markets, North-South International Transport Corridor,Russia, Gas Exports, Western Europe, Amir Ahmadian

Source: Khabaronline
Translated By: Iran Review.Org

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