TODAY.AZ / World news

Azerbaijan, Russia and Iran sign agreement to establish JV on North-South project

09 February 2011 [10:55] - TODAY.AZ
Heads of the railway departments of Azerbaijan, Russia and Iran signed Tuesday a document on establishing a joint venture for creating 'North-South'  railway corridor, which is attended by those countries, head of the international department of Iranian Railways, Abbas Nazari, told Trend.

The head office of the joint venture will be located in Moscow, in turn, its affiliates will be located in Baku and Tehran. For 4 months, the JV will prepare a business plan of building the railway Rasht-Astara (Iran) - Astara (Azerbaijan).

Nazari said that the Astara-Rasht-Astara railway will be constructed on the basis of BOT (Build-Operate-Transfer) contract for 15 years, after which the project will be reviewed, and if during this period, the funds invested in the project are returned, the railways in these countries will be transferred to their use.

About $400 million is envisaged to be invested in the construction of the railway. Investment is planned to be involved by the participating countries at the expense of their banks, as well as other regional financial institutions. There is high probability that it will be Russian banks, said Nazari.

In the first years, the freight traffic volume of the railway is projected at six million tons per year, and subsequently the volume of goods will increase to 20 million tons per year.

Nazari said this is due to the fact that at present Russia transports some 20 million tons of cargo to India per year. It is assumed that after commissioning of the railway North-South, these goods will be transported along this route. Accordingly, transportation costs will be reduced by 30%.


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