Iran and Russia have signed an agreement worth $1.3bn to electrify Iran’s main north-east train line.
Financed by the Russian government, the deal involves Russian Railways subsidiary RZD manufacturing electric locomotives in Iran, electrifying 495km of railway, and building 32 stations, reports official Iranian news agency, PressTV.
Power stations will also be built in the three-year project, and overhead power cables strung along the line, which runs between Garmsar, a town 100km south-east of Tehran, and Inche Burun on the Turkmenistan border.
We plan to expand the dynamics of our bilateral relations. We will pay special attention to the diversification of trade and make a wider use of national currencies in mutual settlements– Russian president Vladimir Putin
Ninety-five tunnels will need to be widened to accommodate the wider rolling stock used on the Soviet broad gauge system.
The project will improve the capacity of passenger trains and raise transit to 8 million tons, said the managing director of the Republic of Iran Railways, Mohsen Poursaeed-Aqaei.
The deal was signed by Russian president Vladimir Putin and Iranian president Hassan Rouhani during a meeting of the Gas Exporting Countries Forum in Tehran on Monday, 30 November.
Russia will finance the project as part of a $5bn credit line for infrastructure projects in Iran. Russian state lender Vnesheconombank will grant another $2.1bn export loan to the Islamic Republic.
President Putin said the two countries had selected 35 priority projects in energy, port facilities, and railway electrification.
According to Alexander Novak, the Russian energy minister, the two countries have agreed infrastructure projects with a collective value ofÂ up to $40bn.
"We plan to expand the dynamics of our bilateral relations. We will pay special attention to the diversification of trade and make a wider use of national currencies in mutual settlements," Putin said.
The upgrade to the northern line will also help prepare for the huge influx of traffic expected if a standard gauge line is built between China and Iran.
Photograph: Presidents Putin and Rouhani in conversation at the gas exporters meeting on 30 November (Kremlin)