Iraq to launch long-delayed rail link with Iran

Iraq plans to launch a long-delayed project to build a rail line linking its southern regions with neighbouring Iran, the transport minister said.

The project was approved by Baghdad several years ago but was delayed due to extensive operations to clear mines and unexploded detonators left from the 1980-1988 conflict between the two countries.

“This project to build a 36 km rail from Basra to the border with Iran will be launched by the end of this year,” the minister Razzaq Al-Saadawi said in comments published on the ministry’s website on Sunday.

Officials in both countries said this year the rail link would largely boost freight and passenger traffic and this would contribute to increasing trade and investment.

Iraq is already the second-largest importer of Iranian products and bilateral trade has grown sharply over the past few years despite Western sanctions against Tehran.

Besides the rail, the two countries have also approved plans to build industry and trade zones at the border crossing in a bid to achieve a target to boost annual bilateral trade to $25 billion within the next five years.

Hazim Al-Khalidi, an adviser to Iraqi caretaker prime minister Mohammed Al-Sudani, 

said trade exchange between Iraq and Iran stood at around $11 billion in 2024, nearly 15 percent of Iraq’s total non-oil trade of about $70 billion.

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“This figure can increase to around $25 billion once agreements are finalised on the establishment of border markets, joint economic zones and industrial cities,” he said.

In late 2023, Al-Sudani and Iranian vice president Mohammed Mokhber laid the foundation stone for the rail that will link the Southern Iraq oil hub of Basra and the Iranian border town of Shalamcheh.

Spain’s Imathia Construcción company has been awarded the contract to build the rail line inside Iraq while Tehran said last year its rail part has almost been finished.