Proposal to create a project entity to handle the North-South ITC development gets green light

The organization will deal with the project of a new railway line from the Russian border with Azerbaijan to the ports of Iran

The Russian Government supported the proposal of VTB Bank to create a planning and design organization for the development of the North-South International Transport Corridor (ITC). The corresponding order of the Cabinet of Ministers was published on the official legal acts website.

The entity will collect and analyze information on required freight concerning the investments in the construction of a new railway line from the Russian border with Azerbaijan to the ports of Iran. It will also be in charge of working out tariffs, issues of synchronizing schedules, developing multimodal transport and digital solutions.

In addition, the entity will assess the capital costs of the project, the competitiveness of the route and prepare a financial and economic model and a feasibility study for the project.

The activities of the project office will be financed by VTB Bank.

Russia and Iran signed an agreement in May 2023 on the construction of the Rasht-Astara Railway, which is the only unfinished railway part of the North-South ITC. The construction of a 162-km section of the mainline will close the railway connection across Russia, Azerbaijan and Iran from Ust-Luga and St. Petersburg to the Port of Bandar Abbas in the Persian Gulf. The railway construction is expected to begin before the end of March 2024.

The North-South Transport Corridor is a 7,200-km transport artery stretching from St Petersburg to ports in Iran and India. North-South ITC has a western and an eastern branch, both running across Iran. The western one foresees cargo transportation by road via Rasht, the eastern one – by railway. The port of Bandar Abbas is the end point in Iran from which freight can be delivered to India by sea-going transport. The western branch also crosses Azerbaijan, the eastern one – Kazakhstan and Turkmenistan. Besides, direct sea-borne traffic from Russia to Iran by the Caspian Sea is also possible.

The volume of Russian freight transported through the North-South ITC is expected to double by 2030, from the current 17 million tonnes to 32 million tonnes. An earlier PortNews report said freight traffic on the North-South ITC doubled to 2.3 million tonnes in the first quarter 2023.