Iran Railroad Projects Endure Despite Sanctions

Iran’s rail sector could be named the top beneficiary of the nuclear deal the country signed with world powers in 2015, as it has managed to considerably improve its performance in the past three years. 

The progress also seems to be resilient to the impact of the US administration’s withdrawal from the deal, announced in May 2018, thanks to the Iranian government’s effective policies, the country’s strategic location and the commitment of its major partners.

Data released by the Islamic Republic of Iran Railways show that the volume of freight transit through Iranian railroads reached an all-time high of 1.5 million tons in the last Iranian year (March 2017-18).

Iran exported 11.9 million tons of oil and non-oil goods through railroads last year, which is also an all-time high. The volume of imports through railroads stood at 3 million tons–the highest since 2013.

World Economic Forum’s Global Competitiveness Index report for 2017-18 ranks Iran 42nd worldwide in terms of the quality of railroad infrastructure. Iran was ranked 46th in 2016-17.

The country has signed several deals with major foreign companies active in the rail sector as well as with financiers since January 2016 when the nuclear deal was implemented. But the US’ abrupt move to leave the international agreement raised concerns over the future of the deals.

Following US President Donald Trump’s May 8 announcement of intention to revive sanctions against Iran, some European firms chose the easy way out of their deals with Iran. However, the number of rail-related firms that have left Iran in recent months is considerably lower than those active in other sectors.

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