Iranian President Hassan Rouhani is reported to have approved a plan to start constructing a 32-kilometre railway line linking the country to Iraq.

According to the local media report, the railway will extend from the Iranian port of Shalamcheh to Basra in Iraq.

The project budget is estimated at IR2,200bn ($52m), according to local Fars news agency citing Iran Railways Company deputy head Mazyar Yazdani.

The executive said Tehran “will construct the railway line … and give it as a gift to Iraq but the side has to cover the construction expenses later”.

The project could link Iran, Iraq and Syria by rail, which then extends to the port of Latakia on the Mediterranean Sea.

It is seen as an important part of the Iranian government’s strategy to counter repercussions of US sanctions imposed earlier this month, “by relying on its regional network of relations, especially in Iraq and Syria.”