Iran’s Khatam-ol Anbiya Construction Headquarters has won a tender worth $2.5 billion for the construction of a railway network in Chabahar Free Zone in the southeast of the country.

The project will be carried out in three phases to reach a total freight capacity of 20 million tones each year, Hamid Behbahani, roads and transport minister, was quoted as saying by the Mehr news agency.

Khatam-ol Anbiya is the main contracting arm of the Islamic Republic of Iran Guard Corps and covers such businesses as construction and oil extraction.

Ports and Maritime Organisation of Iran, a Japanese-Iranian consortium, a Chinese-Iranian consortium and three foreign companies also took part in the tender.

Developing Chabahar is a priority for the Iranian government as there is currently no railway to the port.

Tehran has plans to construct a rail link from the north-eastern city of Mashhad, down Iran’s eastern border to Chabahar Port on the Gulf.

State-run Iran railways already operates a well-established 11,000 kilometres of track and has plans to develop a further 19,000 kilometres.