Azerbaijan, Iran and Russia push on with North-South Transport Corridor at trilateral meet

Azerbaijan, Iran and Russia push on with North-South Transport Corridor at trilateral meet
Rouhani, Aliyev and Putin meet in Baku.
By bne IntelliNews August 10, 2016

By all accounts it was a successful trilateral meeting of the presidents of Iran, Russia and Azerbaijan in Baku on August 8, during which the International North-South Transport Corridor was discussed, among other topics. Following the meeting, Iran’s foreign minister, Mohammad Javad Zarif, said Tehran would host the leaders in the next round of discussions.

All three countries are doubling down on efforts to get the proposed North-South Transport Corridor – the ship, rail and road route for moving freight between India, Russia, Iran, Europe and Central Asia – open in the next few years, with Russia keen to fund portions of it. The corridor is aimed at bolstering trade links between major cities such as Tehran, Moscow, Baku, Bandar Abbas, Astrakhan and Bandar Anzali on the Persian Gulf.

“If the rail link to Iran is built, it can take some share of the cargo that’s being transported via Suez,” Russian Transport Minister Maxim Sokolov said in an interview. Plans for the railroad may be completed next year, he added.

The economies of the three countries and those of dozens of other states are expected to benefit from the project, including much of Central Asia which has suffered from being far from ports.

During the meeting, several Iranian ministers discussed their respective areas with counterparts from both countries, according to a report from Iran Student News Agency.

President Hassan Rouhani and his counterparts Vladimir Putin and Ilham Aliyev explored cooperation on joint economic projects and regional security issues in the Baku talks. “The meeting will enable the three countries to expand cooperation in energy, transport, tourism, business, customs and other economic sectors,” said the Azeri foreign minister, Elmar Mammadyarov 

Declaration of intent

Concrete measures were announced at the trilateral meeting with participating governments agreeing to adopt effective measures to develop transport as well as communications infrastructure. “All parties will exploit the opportunities that will arise for the transport of passengers and goods after the completion of the International North-South Transport Corridor,” the declaration announced.

In addition, the three governments also agreed to work together to push ahead with an overhaul of the rail network which spans Iran both north, south, east and west and connects to their respective capital cities.

One of the first joint railroad projects is the Rasht-Astara Railroad, for which Russia only last week announced over $2bn for funding the project.

That project involves the construction of 369km of bridges and railroads to link southern sections to northern ones, which then would connect onto Tehran-Rasht railway.

The sides also discussed the legal status of the Caspian Sea. The five littoral states have been at odds since the dissolution of the Soviet Union over the definition of the legal status and regime of the Caspian Sea. If the Caspian is a ‘sea’ in legal terms, the United Nations Convention on the Law of the Sea of 1982 would be applicable. If, on the other hand, the Caspian is deemed a ‘lake’ in legal terms as it was during Soviet times, then customary international law concerning border lakes would apply.

Energy corridors

On the sidelines of the meeting, both Iran and Azerbaijan restated their intention to continue to connect their respective power grids according to a report from Mehr News Agency.

"Iran and Azerbaijan have the capacity to exchange 500MW of power in the synchronized mode and up to 200MW under the islanding scheme," Houshang Falahatian told Mehr News Agency.

The minister also said that Azerbaijan was preparing itself to connect to Iran’s power grid currently  and would be synchronised in the next week.

Also this week, Iran’s energy minister, Hamid Chitchian, visited Baku to finalise the synchronisation issue in a meeting with the executives of AzerEnergy CJSC, the largest electrical power producer in Azerbaijan.

Up until recently, Azerbaijan has sold much of its excess power to Iran’s northern regions where power cuts are a serious problem with the growth of the cities.

According to Chitchian, Iran is keen on attracting $50bn in investment in its electricity sector, including $35bn in power production and $15bn in transmission projects.