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North South Transport Corridor promises “cheaper, faster” trade routes for Russia & Iran

The North South Transport Corridor (NSTC) intermodal network will be “cheaper and faster” than utilising existing transport routes, according to its investors. 
 
Investors from Azerbaijan, Iran and Russia agreed competitive transit rates in March 2016. Each of these nations plays crucial roles as major trade hubs along the proposed 3,500 kilometre intermodal route linking India to the European Union and Baltics. Transit rates are not to exceed $3000 per container along the NSTC.
 
Once active, the NSTC will link Russia’s St. Petersburg to Mumbai in India. Freight will be carried via rail, road and sea while passing through Azerbaijan and Iran while crucially bypassing the Suez Canal.
 
Avoiding the Suez Canal results in a reduction of transit times by over 20 days. The traditional ocean route via the Canal to St. Petersburg takes 45 days. Once new infrastructure comes online, the NTSC will take just 14 days -  greatly reducing both time and transport costs for logistics firms operating across the corridor.
 
Overseeing the NTSC route will be RZD Logistics, the logistics division of RZD Russian Railways. The route itself is a few years away from opening as Iran is currently constructing a $1.5 billion dollar, 396 kilometre stretch of the Qazvin-Rasht-Astara railway. Construction is expected to conclude in 2019. 
 
On completion, 22 new tunnels and 15 new bridges will have been built. The railway is being built in sections with the commissioning of the Qazvin-Rasht leg expected in 2017. 
 
Building new rail routes, and updating the existing network, is a top priority for Iran as the nation begins to reposition itself as a major international trade route after the repealing of economic sanctions affecting Iran in January 2016.
 
The NTSC promises to be truly intermodal – creating freight opportunities for trucking companies, sea cargo operators and rail freight operators to make their mark across a huge network. From Mumbai in India, freight will initially be transport via ocean routes to the port at Bandar Abbas in Iran’s southern coast.
 
Cargo will then be transported from Bandar Abbas by rail to each of Iran’s newly commissioned rail heads (Qazvin and Rasht). It will then be forwarded by truck to the Astara-Astara crossing on the Azeri border before re-joining the rail network all the way to St. Petersburg via Moscow.
 
Logically, the establishment of the NSTC is fantastic news for freight operators. Reductions in both costs and transit times points towards increased higher cargo volumes travelling from India to St. Petersburg and vice versa.
 
While operators will have to wait a further three years until the completed route becomes active, Iran is more than ready to meet its commitments. 
 
Speaking at the NSTC: New Directions, Development & Prospects Forum in February 2016, Iran’s Vice Minister, Roads and Urban Development Chairmen of the Board and Chairman of Iranian Railways said Iran will transport 10 million tons of cargo annually. 
 
“Qazvin-Rasht-Astara requires an investment of $1.5 billion. But this project is a priority for Iranian government and we will ensure the necessary funds. Development of cargo transportation could give momentum to global economic recovery,” Mr Aghaei said the NTSC Forum. 
 
“Development of cargo transportation could give momentum to global economic recovery.
 
“Shortening of transit routes, cutting costs and providing transportation of goods in a short time can contribute to the world economy. Iran is ready to fulfil its commitments in this area.”
 
Iran has launched a nationwide programme of transport projects but still requires international investment in a number of vital areas to create a truly world class transport and logistics environment. 
 
The Iranian economy presently lacks development, design, engineering and joint investment for production and export. Western businesses can find golden opportunities via investing in the above sectors and can ensure their technical skills, updated technologies and vital experience is put to good use in lucrative collaborations with emerging Iran’s private sector.
 
Additionally, major developments, such as the NSTC, offers Western operators major routes with which to supply cargo carrying and additional logistics services.


 

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