ARMENIA HAILED RAIL LINK WITH IRAN

Moj News Agency
October 18, 2008 Saturday
Iran

The governments of the two countries have been discussing ways of
implementing it but have yet to reach final agreements. The lack
of a rail link between them is seen as a major hindrance to the
development of Armenian-Iranian commercial ties as well as the use
of Iranian territory in Armenia’s transport communication with the
outside world. Armenian President Serzh Sarkisian announced earlier
this month that work on the railway will get underway "in the coming
months," saying that this and other large-scale infrastructure projects
are vital for Armenia’s economic development.

But he said nothing about the likely cost of the construction and its
sources of funding. Sarksian likewise avoided commenting on these
specifics, saying only that the project has reached "the phase of
active studies" and that its implementation is a matter of time. He
said the Armenian government is currently considering three potential
routes of the Armenian section of the would-be railway. "After choosing
one of those variants we could switch to engineering design and cost
calculation, which will make construction possible," Sargsian told
RFE/RL in an interview. In any case, he said, the railway will be
approximately 400 kilometers long and will pass through Armenia’s
mountainous Syunik region bordering Iran. Citing Syunik’s difficult
landscape, economic analysts say building the railway would cost
Armenia at least $1 billion, a figure equivalent to about 40 percent
of its state budget for this year. Some have wondered if the project
is feasible at all. "We can not come up with concrete estimates today
because they would be meaningless without feasibility study documents,"
said Sargsian. "But obviously it will be an expensive project. In
terms of funding, we have a number of options." In his words, one
such option is to set up a consortium with Iran and Russia, whose
state-run rail company took over long-term management of Armenia’s
entire rail network earlier this year. He added that international
finance institutions such as the World Bank and the European Bank
for Reconstruction and Development have also expressed interest in
partly financing the Iran-Armenia railway.