Iran’s railway modernisation programme has received a boost with the signing of a contract between Islamic Republic of Iran Railways and Russia’s RZD International for the electrification of a 495-kilometre railway line from Garmsar to Inche Bouroun in Golestan near the border with Turkmenistan.

The contract is valued at €1.2bn ($1.28bn).

The project will be financed with Russian export credit, according to RZD International, a Russian Railways subsidiary.

Works are expected to begin immediately once the formalities for accepting the project financing is completed. The project is expected to be completed within 50 months.

Scope of the contract includes:

• electrification works
• reconstruction of railway infrastructure
• modernisation of signalling and communication system
• supply of machinery and vehicles, electric locomotives, rails and switches
• technical assistance during the first year of operation

Iran is undertaking work for close to 3,000km of railway line, including two new lines.

These include a 440km line called Gharb West rail, which extends from the City of Arak in central Markazi Province to the Khozravi Crossing in Kermanshah Province, which borders Iraq.

In October 2016, Germany’s Siemens signed a contract to supply components for 50 diesel-electric locomotives that are destined for the railways agency.

Apart from the locomotives, Siemens has earlier agreed to a number of projects including the electrification of the Tehran-Esfahan railway line and the Tehran-Mashhad high-speed railway.

It is understood that the $1.2bn financing being negotiated between the Iranian government and Germany’s government-owned development bank KfW Import-Export Bank (Ipex) will be utilised for some of these projects.