LAHORE: The US sanctions on Iran have emerged to be another issue that may further delay resumption of the Istanbul-Tehran-Islamabad (ITI) freight train.

On the other hand, Turkey and Iran have reiterated their stance, urging Pakistan to charge tariff for the train — named as Economic Cooperation Organisation (ECO) train — on the basis of actual weight and per kilometre instead of the fixed charges for the 1,990km journey from Zahedan city to Islamabad.

“Sanctions on Iran have emerged in a recent meeting for the first time since talks on resumption of the train among the three countries began in October last year. I don’t know why the issue came under discussion during a recent virtual meeting,” an official source in Pakistan Railways (PR) while talking to Dawn on Saturday.

A meeting of the ITI train working group was virtually held on April 19. Hosted by the Tehran-based ECO Secretariat, it was attended by the representatives of PR, International Organisations Group, Railways of Iran, Rasan Rail Pars, Harun Brothers Company (a private freight forwarding agency nominated by the PR) and Turkish railways.

According to the minutes of meeting, the representative of Iran railways requested the participants to provide a concrete proposal on the new rate for tariff for conventional wagon (for export, import and transit) and the projected amount of cargo along the route.

“On the issue of sanctions, the representative proposed the meeting to devise alternative plans based on a situation where the sanctions have been lifted and another with the sanctions in place. On the proposed conventional Wagon (for export, import and transit) tariff of 0.007 euros, the representative said that based on Iran’s operational experience the rate is not reasonable. However, Iranian railways is willing to consider a concrete proposal in this regard,” the minutes read.

The representative of Harun Brothers provided the meeting with overall information on potential cargo for the return trip of the train to Istanbul. He said that he is in negotiation with a customer in Islamabad who transports about 65,000 tonnes of stones annually from Pakistan to Turkey.

“The customers in Pakistan along this route can be categorised in two groups: high-value exporters and low-value exporters. The high-value customers have no problem with any rate that we provide if they receive fast transport of 12-14 days from Islamabad to Istanbul. However, they are concerned by the US sanctions as the banks have said in their Letter of Credit that shippers cannot use any Iranian port or transit cargo via Iran. The issue has been discussed at highest level of Pakistan government,” he explained.

“For this reason, we are obliged to concentrate on low value exporters as we believe that 40-45 per cent of these customers are willing to use the route only if they are provided with lower rates,” the representative said. He proposed making the route feasible by offering two-way service so that no train returns empty.

The Turkish team once again reiterated their country’s preference for the distance for charge to be calculated as container/conventional Wagon Per kilometers not as a fixed rate of 1,990 km single journey for all destinations. The representative also added that the lower cost of sea transport has made this means of transport more appealing to customers. They proposed to concentrate on a new customer profile (for trading items/articles free of US embargo/sanctions) as US sanctions on Iran prevented (existing customers) from considering this route.

It was decided that representatives of forwarding companies from the en-route ECO member states will submit a report on the price comparison between marine and rail transport along with a proposal for new prices along the route.

Published in Dawn, April 25th, 2021