ITI rail link opens in blow to US bid to isolate Iran

The first freight train to run from Pakistan to Turkey through Iran has departed after a 10-year hiatus in a major boost to the trading credentials of the three founders of the Economic Cooperation Organization (ECO).

The 6,540 km journey from Islamabad to Europe's largest city will take 10 days, less than half the time needed for the equivalent voyage of 21 days by sea.

The train carrying rice, dates and pink salt left a depot at Margala station in the Pakistan capital to the Turkish city on the Bosphorus Strait on Tuesday, hauling more than a dozen containers.

It will cover 1,990 km inside Pakistan, passing through Quetta into Taftan at the Iranian border and on to Tehran and Tabriz over a 2,603 km stretch before ending up in Istanbul through Ankara.

The three countries launched the Islamabad-Tehran-Istanbul (ITI) container train service in 2009, but it only got as far as test runs and was never fully operational.

Even so, they always planned to follow up the initial freight trains with passenger services and operationalize the ITI transnational line with the aim of enhancing connectivity with China's Belt and Road Initiative (BRI).

"The start of the container train from Pakistan to Iran and Turkey was a long-standing dream of the countries of the region, which came true again," Pakistan's Railways Minister Azam Khan Swati told the opening of the project.

He said strengthening and expanding ECO rail cooperation can contribute to regional stability and peace.

"Regional business cohesion is in dire need of important projects such as the Islamabad-Tehran-Istanbul railway," Pakistan's Foreign Minister Shah Mahmood Qureshi said.

"As one of the most effective vehicles, the ECO train can virtually help expand exports, imports and trade among the member countries," Adviser to Prime Minister of Pakistan for Commerce and Investment Abdul Razak Dawood told the ceremony.

The ITI, by extension, will connect to China's Xinjiang autonomous region which is populated by ethnically Turkic Uighur Muslims and further boost BRI, a trillion-dollar plan to connect the infrastructure and economies of countries across Asia, Africa and Europe.

China regards Iranian transport in particular as part of BRI and has sought close involvement in the build-out of the West Asian nation's infrastructure. The ITI railroad, on the other hand, will help Iran move around US sanctions.

For Tehran, this is an attractive alternative trade route because the ECO countries trade in local currencies.

ECO stands for the Economic Cooperation Organization, a 10-member political and economic intergovernmental organization founded in 1985 by Iran, Pakistan and Turkey.

The United States has been following a policy of “maximum pressure” against Iran in order to isolate the country through severing all modes of international trade with the Islamic Republic. However, it is practically impossible to isolate and stop Iran from trading with its neighbors.

Earlier this month, an official with Iran’s Road Maintenance and Transportation Organization said the Islamic Republic, Azerbaijan and Georgia have reached an agreement on establishing a transit route connecting the Persian Gulf to the Black Sea.

"Georgia and Iran are the two main parties to the agreement, as Iran is connected to the free waters through the Persian Gulf, and Georgia has two important trading ports east of the Black Sea," Javad Hedayati said.

"On the other hand, Georgia and Azerbaijan have made great efforts to improve and develop their transportation infrastructure, so we have tried to increase cooperation with both these countries," he added.

This transit route can potentially link with the ITI and further boost connectivity in the region, given that Pakistan and Turkey are both close allies of Azerbaijan in addition to having strong trade relations with Iran.

Last month, Iran and Pakistan signed their first barter trade agreement to exchange Pakistani rice with Iranian LPG, marking a watershed in a quest to overcome the biggest hurdle to business between the two big neighbors.

Iran, Pakistan look to new era in trade with barter deal

Iran and Pakistan have signed their first barter trade agreement to exchange Pakistani rice with Iranian LPG, marking a watershed in a quest to overcome the biggest hurdle to business between the two big neighbors.     

Other than the barter trade in rice, the two sides agreed on construction of border markets, and movement of trucks under the Convention on International Transport of Goods (TIR) cooperation for Pakistan to reach European and Caucasian markets and for Iran to access the Chinese market.

In April, Iran and Pakistan opened their third official border crossing with the aim of facilitating business and trade exchanges and creating new job opportunities for their border residents.

The Pishin-Mand crossing is only 70 km from the Pakistani port of Gwadar which is being developed through the $60 billion China Pakistan Economic Corridor to link with Xinjiang province.

Iran and Pakistan hope to sign their long-awaited free trade agreement in the next couple of months which they believe will raise bilateral trade to $5 billion a year from $1 billion now.

Iran has also very close trade and economic relations with Turkey, which they have long pledged to raise to $30 billion a year from around $10 billion now.

On Monday, Managing Director of the National Iranian Oil Company (NIOC) Mohsen Khojasteh-Mehr said the two countries were negotiating to extend a 25-year deal for supply of Iranian natural gas to Turkey.   

Turkey is dependent on imports for almost all of its energy needs and Iran is a key supplier of Ankara’s natural gas purchases which generate nearly 40 percent of the country’s electricity production.

Through a pipeline, Iran sells about 10 billion cubic meters a year of gas to Turkey under a supply deal signed in 1996. The gas exports are carried out via a 2,577 km (1,601 miles) pipeline running from Tabriz to Ankara.

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