Last week Armenian Prime Minister Tigran Sargsyan submitted a loan application to the Eurasian Economic Community’s anti-crisis fund to finance construction of an Armenia-Iran railway. (EAEC is an economic organization with six post-Soviet member-countries: Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. It develops a joint foreign economic policy, as well as tariff and pricing policy).

The perspective of building such a railroad with Iran is of exceptional significance to Armenia, because it would link Armenia with ports of the Indian Ocean.

During the last fifteen years Iran has doubled its railway net and is planning to become the main railway crossroad in the center of Asia.

Currently there are more than 9,000 km of European standard railway in Iran and the plan is that by 2020 the Iranian railway network will stretch up to 25,000 kilometers.

The railroad would allow Armenia to use an alternative road for transportation of energy resources and other products, once given an exit to the outer world.

Currently Armenia’s only railroad communication is through Georgia – and often unstable link.

It should be enough to point out that in 150 hours of the Georgian war in August 2008 Armenia’s economy suffered $680 million damage.

The status of the Armenian railways has shifted after the agreement reached by the presidents of Iran and Armenia.

In February 2008, a concession contract on transfer of the Armenian Railways state CJSC to South-Caucasian Railways CJSC, which is the affiliate of Russian Railways public corporation, was signed. This decision did not affect the Armenia-Iran agreement.

According to the document the railway will stretch 540 km, with 460 km passing through Armenia.

The most frequently announced route among three options is Gagarin-Gavar-Martuni-Jermuk-Vayk-Sisian-Kapan-Meghri. The remainder of the line will be laid in Iran reaching Merant station.

The estimated budget of Iran-Armenia railway is $1.5-2 billion, the estimated timeframe of implementation being 6 years.

In 2008, Prime Minister Tigran Sargsyan, speaking about possible starting date of the construction, said that “the best scenario to the government would be if the construction could be launched in late 2009”. It is mid 2010, but the construction has not started yet. Insufficient finances are among the main reasons for delay.

Russian Prime Minister Vladimir Putin stated last week that Armenia’s application for $1 billion loan is under consideration.