Azerbaijan, Russia, Iran to Discuss Rasht-Astara Railway Construction

Authorities from Azerbaijan, Russia, and Iran are set to discuss the progress of the construction of the Rasht-Astara railway line, part of the International North-South Transport Corridor (INSTC).

"We plan to hold a trilateral meeting in the near future with the participation of the Foreign Ministers, Transport Ministers, Energy Ministers, and Customs heads of Iran, Russia, and Azerbaijan," TASS reported, citing Iran's Ambassador to Moscow Kazem Jalali.

The ambassador noted that an agreement on the implementation of this project is expected to be signed by March 2025.

On May 17, 2023, Russia and Iran signed an agreement for the joint construction of the Rasht-Astara railway route.

On January 17, 2025, during the visit of Iran’s President Masoud Pezeshkian to Russia, Tehran and Moscow agreed to sign a document confirming the decision to start building the line. The Russian side consented to start the construction work after the signing of the implementation agreement in March of this year.

Moscow and Tehran have long discussed the financing issues with the ultimate approval of investment of over a billion euros. According to media reports, 1.3 billion euros of an intergovernmental loan has been agreed upon. The total cost of the Rasht-Astara line is estimated at 1.6 billion euros.

The Rasht-Astara railway is the only missing component of the uninterrupted rail connectivity between Russia and Iran along the western coast of the Caspian Sea. If completed, trains from Central Russia could seamlessly travel to the Indian Ocean coastal ports of Iran, and back.

The 7,200 km-long INSTC was established through an intergovernmental agreement signed by Russia, India, and Iran in 2000. The number of participating nations later grew to 14. Russia and Iran anticipate that this corridor will provide an alternative to the Suez Canal, significantly reducing cargo transit times across Eurasia.

The corridor consists of multiple routes: the western land route runs through Azerbaijan, the eastern route passes through Turkmenistan and Kazakhstan, while the waterway traverses the Caspian Sea.

The railway authorities from Azerbaijan and Iran recently discussed the expansion of operations at the freight terminal located in Astara, Iran, as well as ongoing developments at the terminal.

On January 22, Azerbaijan Railways (ADY) Chairman Rovshan Rustamov met his Iranian counterpart Jabbar Ali Zakari Sardroudi to address the issues that would help facilitate faster and more efficient cargo transshipment along the INSTC via the Astara cargo terminals in Azerbaijan and Iran. These terminals contribute to unlocking the corridor’s strategic potential, strengthening the transport infrastructure of these countries, and promoting regional trade development.

During the meeting, the railway leaders signed the “Strategic Cooperation Plan on the Implementation of the Astara Terminal Construction and Operation Agreement." This document covers the approval of Iran’s Astara terminal’s masterplan, the completion of construction work by the end of this year, the recognition of final investments, and other related matters.

The main goal of the INSTC is to reduce the cargo transportation time from India to Russia, as well as to Northern and Western Europe from over 6 weeks to 3 weeks with the corridor’s full-fledge exploitation.

According to calculations, the cargo transportation potential of the INSTC will increase from 14.6 million tons to 24.7 million tons by 2030, which will significantly contribute to Azerbaijan becoming one of Eurasia’s major transit and logistics hubs.

In December 2024, an agreement was signed between Azerbaijan and Russia to enhance cooperation on transit cargo transportation via the INSTC, including the development of railway transportation. The document fosters joint efforts for the development of railway infrastructure and transit transportation while increasing the potential of the Western route of the corridor via Azerbaijan.

In September 2024, ADY secured a $131.5 million loan from Asian Development Bank for the modernization of the Sumgayit-Yalama railway line along the INSTC. Last year, the company also completed the reconstruction of the Astara freight terminal in Azerbaijan and introduced a fast customs clearance service.

The terminal offers multimodal transport services and discounted tariffs for cargo handling and transportation. The Astara terminal's operations have contributed to a 10-15% increase in transit cargo shipments along the INSTC by the end of 2024.

The full realization of the terminal’s potential for handling larger freight volumes is expected once the Astara-Rasht railway line is commissioned. In 2024, the volume of transit cargo transported through Azerbaijan via the INSTC reached 814,000 tons, marking an increase of more than 28% compared to the same period in 2023.