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China’s belt and road: what’s holding up the trains from Pakistan to Turkey via Iran?

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A Chinese goods train arrives in the Iranian capital Tehran on February 15, 2016, as part of China’s Belt and Road Initiative. A planned Istanbul-Tehran-Islamabad train route will also fit into Chinese President Xi Jinping’s signature trade and infrastructure plan. Photo: EPA

Recently, Turkey, Iran and Pakistan announced they would revive the Istanbul-Tehran-Islamabad (ITI) railway, a project launched in 2009. Despite several test runs, the railway link had not become fully operational.

At the Economic Cooperation Organisation transport and communications ministers meeting held virtually last month, Turkish Transport Minister Adil Karaismailoglu announced that the project would be relaunched this year. After finalising tariff rates and a timetable, the service will initially provide container transport; freight services on conventional wagons will be added in due course.

Once fully functional, the railway can boost trade in other countries, including Afghanistan, Azerbaijan and the five Central Asian states, under the Economic Cooperation Organisation, a development, trade and investment platform founded in 1985 by the leaders of Iran, Turkey and Pakistan. The train can cover the 6,500km Pakistan to Turkey route in just 11½ days, compared to 45 days by sea.

According to recent media reports, the service could also connect to Xinjiang in China through Pakistan’s Mainline-1 railway. The ML-1 project, under which Pakistan’s existing railway tracks will be upgraded to allow trains to move twice as fast as they currently do, is one of the most important projects under the China-Pakistan Economic Corridor (CPEC).

Approved by Pakistan’s top economic body in August 2020, the project will cost US$6.8 billion, with China providing 90 per cent of the financing. It is expected to be completed by the end of 2026.Despite its huge benefits for the region, the ITI railway project has been held up for more than a decade. One of the biggest hurdles has been carrying out business transactions with Iran after economic sanctions were imposed.

Pakistani traders from the Quetta Chamber of Commerce even suggested a barter arrangement or using banks exempt from restrictions for financial transactions, but this never worked out.

Second, due to insufficient infrastructure, only cargo train journeys were tried out even though the route has been recognised as an international corridor by the United Nations. According to the previous Pakistani railways minister, Ghulam Ahmed Bilour, a passenger service will be considered once the cargo train service is fully operational.

Finally, Pakistani train connections needed a standard upgrade to connect with international lines. Pakistan’s railway will connect with the ITI rail route via Quetta in the southwestern province of Balochistan. The Quetta-Taftan railway track, which will be used for the ITI train, was built a century ago and badly needs upgrading.

Last August, Pakistan’s railways minister announced that a feasibility study for the proposed upgrade had been completed and 112 billion Pakistani rupees (US$694 million) would be spent on repairs. This process will have to be completed quickly for the ITI train to be up and running on schedule.

The glitches and delays confronting the service are reminiscent of the Regional Cooperation for Development Highway project between the same three countries. The highway was their first attempt to boost trade through road and rail links under the Regional Cooperation for Development platform, which was set up in 1964.

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Pakistan’s Prime Minister Imran Khan (left) shakes hands with Iranian President Hassan Rowhani after a joint press conference in the Iranian capital Tehran on October 31, 2019. Photo: AFP

The ITI railway is particularly attractive to Iran as it can help stimulate the country’s economy battered by US sanctions. Lukasz Przybyszewski, West Asia analyst for the Asia Research Centre at Warsaw’s War Studies Academy, noted that “for Tehran, this is an attractive alternative trade route because the ECO countries trade in local currencies”, adding that “in times of crisis and war, such alternative land trade routes are very valuable and profitable”.

The ITI train project can also kick-start important rail routes under China’s Belt and Road Initiative. According to Przybyszewski, China considers Iranian transport links part of the initiative.

China has also wanted to establish train links with Turkey for a long time. On December 4, an export train from Turkey started for China and arrived in Xian in Shaanxi province on December 19, becoming the first train from Turkey to China.

The train followed the circuitous Caspian International Transit Route via the Baku-Tbilisi-Kars railway. In comparison, the ITI route is much less complicated and, by connecting Beijing to both Iran and Turkey via Pakistan, it can become an intrinsic part of China’s Belt and Road Initiative.

The ITI train route also adds to the strategic and economic significance of Pakistan. However, this will come to pass only if Islamabad can boost its rail infrastructure.

 

Sabena Siddiqi is a foreign affairs journalist with a special focus on the Belt and Road Initiative, the China-Pakistan Economic Corridor and South Asia