News ID: 153145
Published: 0655 GMT June 13, 2016

Azerbaijan, Iran mull three options for financing railway construction

Azerbaijan, Iran mull three options for financing railway construction

Azerbaijan and Iran are considering three options for financing the construction of the Rasht-Astara railway section of the North-South transport corridor which is to connect northern Europe to Southeast Asia, said an Azerbaijani official.

Head of Azerbaijan Railways CJSC Javid Gurbanov further told ANS TV channel that the construction of the Rasht-Astara railway section is worth nearly $900 million, according to estimates by the Iranian side, reported Trend News Agency.

He added that the Azerbaijani side has yet to conduct studies on these calculations. "We have asked Iran to provide us documents on the project, and we will submit it to the ministries of finance, economy and emergency situations of Azerbaijan," Gurbanov said.

"An evaluation will be conducted, and its results will be presented to the president of Azerbaijan. The Azerbaijani side expressed its readiness to provide financial support to Iran in the construction of this section."

He noted, "Iran's President Hassan Rouhani is to visit Azerbaijan on August 8-10, and until that time, we will try to prepare the necessary documents and protocols to provide financial assistance regarding this section, and these protocols will be signed between the two countries once the president of Azerbaijan approves them."

Gurbanov however added that the form of financing sources depends on the outcome of the negotiations.

"It will depend on the conditions of the agreement whether the sources of financing will be in the form of a loan [which will be provided by Azerbaijan] to Iran, whether Iran will attract a foreign loan or it will be a loan attracted within the country."

He said, "All the three options are being considered, and the one which suits the two sides will be chosen.

"Iran wants the companies of the two countries to work together and on equal rights. However, there are options of working within a joint venture or holding an international tender."

The Qazvin-Rasht-Astara railway, a part of the North-South transport corridor, will connect the railway networks of Iran, Azerbaijan and Russia.

Initially, three to five million tons of cargos per year will be transported via the corridor, and this figure will increase to 10-12 million tons in the future, according to preliminary estimates.

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