Iran-Pakistan Railway Link: A Step Toward Stronger Trade Ties

TEHRAN (Iran News) Mohammadreza Tavakolizadeh, president of the Khorasan Razavi Chamber of Commerce, Industries, Mines, and Agriculture, spoke at a joint meeting with the director general of Khorasan Railways and the head of the province’s Management and Planning Organization. He highlighted that linking Iran’s rail network to Pakistan via the Mirjaveh border holds immense potential for boosting trade. Under the proposed plan, only 500 meters of railway would need to extend into Pakistani territory to facilitate the loading and unloading of cargo wagons. This connection could significantly increase the transport capacity for goods like sulfur, fostering stronger regional economic cooperation.

Tavakolizadeh noted that involving key stakeholders, such as the steel industry, in constructing railway lines could prove beneficial. However, he stressed that the economic viability for private-sector participation remains a critical concern due to the long payback period of such projects.

He underscored the need for coordination among the Ministry of Roads and Urban Development, the Ministry of Petroleum, the Ministry of Industry, Mines, and Trade, and private investors to ensure the project’s success. The Budget and Planning Organization, as a guiding body, could play a pivotal role in driving the initiative forward.

Tavakolizadeh also pointed to investment in rail fleets as a promising opportunity for the private sector. While some Iranian companies have purchased wagons, few have comprehensively ventured into supplying freight trains. He suggested that models like investing in locomotives and establishing independent fleets could yield substantial profits for private investors.

Seyyed Jamaluddin Hosseini, head of Khorasan Razavi’s Management and Planning Organization, stated during the meeting that accelerating the construction of the second railway line on the Sangan-Torbat Heydarieh-Bafq axis, along with developing complementary routes, could enhance national transport efficiency, reduce logistics costs, and promote sustainable economic growth.

Hosseini estimated the cost of the first phase of the Sangan-Torbat Heydarieh-Bafq second line at approximately 5 trillion IRR (Iranian Rials), with construction set to begin at five key points. He added that the government could offset part of the investment under Article 12 of the Law on Removing Barriers to Production.

Referring to the Sangan route, Hosseini noted that four critical segments, spanning 110 kilometers, have been prioritized to boost capacity by up to 15%. The estimated cost for this section is 6.5 trillion IRR, and with adequate funding, the project could be completed within a year.

Hosseini proposed forming a provincial consortium involving investors, private-sector entities, and steel companies to advance rail transport development in Sangan. In this model, steel firms—major beneficiaries of the route—would collaborate with local investors. While previous memoranda of understanding between the railway authority and steel companies failed to materialize into operational contracts, Hosseini attributed delays to the project’s multi-sectoral nature, requiring alignment among the Ministries of Petroleum, Roads, and Industry. He also cited the affordability and availability of road transport as a factor reducing rail usage.

As the coordinating body, the Budget and Planning Organization has taken on the responsibility of managing this multifaceted project, holding numerous meetings to finalize funding and resource allocation decisions. Hosseini emphasized that both the government and private sector stand to benefit from its implementation.

Mostafa Nasiri, director general of Khorasan Railways, reported that in 2023, approximately 10.5 million tons of cargo were transported from Sangan to various destinations. Of this, 5 million tons could have been moved by rail but were shifted to roads due to capacity constraints. This reliance on road transport has increased costs, fuel consumption, and road wear.

Nasiri stressed that alongside building new lines, optimizing rail traffic management could enhance capacity. He cited the use of virtual block systems on busy routes like Tehran-Mashhad, where dividing 20-kilometer blocks into 4-kilometer segments has enabled more frequent train passages—a method that could also improve freight route efficiency.

The proposed rail link with Pakistan and the Sangan upgrades reflect Iran’s broader strategy to bolster its transport infrastructure, reduce logistics costs, and strengthen regional trade ties, particularly with Pakistan. If realized, these projects could mark a significant leap forward in the country’s economic connectivity.