Kazakhstan, Turkmenistan, Iran sign agreement on rail freight traffic

Turkmenistan Materials 16 February 2016 15:51 (UTC +04:00)

Ashgabat, Turkmenistan, Feb. 16

By Huseyn Hasanov- Trend:

Kazakhstan, Turkmenistan and Iran signed an agreement on international rail freight traffic and tariff policy within the framework of North-South corridor.

The agreement greatly facilitates the design of traffic between its members, said the report of the Institute for Strategic Planning and Economic Development (ISPED) of Turkmenistan.

"The opening of the new corridor - Uzen-Gyzylgaya-Bereket-Etrek-Gorgan - is an historical event, importance of which can not be overestimated for the formation of a global market of transport services," said the report.

The new railway line opens the optimal transport route between countries of Europe and the Persian Gulf, contributes to the creation of related infrastructure, logistics centers, new points of growth, thousands of new jobs.

It should be noted that there is a traditional way of transporting containers from the Asia-Pacific region to Europe by sea transport through the Suez Canal.

Large seagoing vessels - tankers and container ships of large capacity - can deliver a large volume of goods to the destination. There, however, is a great risk of force majeure situations on water; in addition, transshipment of cargo at the port takes a long time, according to the report.

In addition, a ship, skirting India, across the Indian Ocean reaches Europe in 30-45 days, while companies are interested in a much faster delivery.

"Ground transportation fully satisfies these requirements; their main advantage is the significant reduction of the distance: rail link between Europe and China through Turkmenistan reduces the length of the traffic more than twice compared to the sea route," said the report.

The North-South transport route is completely ready for freight traffic growth, and considering the lifting sanctions on Iran by the international community the highway's use becomes the most relevant one, said the report.

The North-South project was implemented on the basis of an agreement signed among Turkmenistan, Iran and Kazakhstan in 2007.

Initially nearly 3-5 million tons of cargo will be transported per year via this route, and these volumes will increase up to 10-12 million tons in the future, according to preliminary forecasts.