More than $6bn worth of rail projects in Iran are under threat because of rising project costs and an absence of overseas funding.
Tehran is reviewing its entire rail strategy to prioritise the most critical and affordable routes.
Iran has about 7,000 kilometres of rail routes under construction or study. The network was originally expected to cost $3bn and was scheduled to be complete by now.
However, the rising cost of raw materials, a scarcity of engineering resources and the pressure of US-led sanctions has forced the national rail regulator, Iran Railways, to reconsider its plans.
“These projects were all intended to be complete by now, but because of the lack of finance they were delayed, and in that time the cost has doubled,” says one industry source close to the regulator. “There was no point proceeding with the old studies because the costs were so inaccurate.”
A series of studies to re-cost the projects has now been launched. “Costs vary because of the terrain but average out at about $900,000 a km of single track railway, so that is $6.2bn for all 7,000km,” says an official at the Construction & Development of Transportation Infrastructure Company, a government body.
The uncertainty over the rail expansion programme has led to disagreements between government ministries over which projects should be given priority.
“Which routes get priority has become political,” says the industry source. “Each ministry wants a railway to link this factory or this oil field or this port. There is not the money to build them all now, so it has caused arguments between ministries. If they are not built now, costs keep going up.”
At present, the projects being prioritised are the track between Esfahan and Shiraz, the export line between Mashhad in the northwest and the southern port of Chabahar, and the route on the northern Caspian coast between Bandar-e Anzali and Astara.
However, even these projects are struggling to attract financing.
Separate plans for a high-speed line between Tehran and Esfahan are also being scaled back.
On 5 August, the local government in Esfahan launched a renewed appeal for investment for the link (MEED 4:1:08).