Iran, positioned at the crossroads of the 7,000-mile Silk Road, the ageless trading track between China and the West, has embarked on a variety of transport and other projects to reconstruct, revitalize, expand, and diversify its economy to become the epicenter of Asia-Middle East trade.

These diverse projects mainly seek to capitalize on Iran's rich resources or on its geographical location. They aim at returning Iran to its traditional role in expanding trade between Europe and Asia and making it a trade powerhouse. As such, their determination has strategic and economic significance for shippers and traders not just across Asia to Europe, the traditional end of the Silk Road, but all along the Arabian Peninsula, to India and the Mediterranean Sea as well.

Apart from many under-construction highways and ports, railway construction reflects the determination of the Iranians to achieve their objective. The country is now setting a Middle East record for railway construction.

Mohammad Saeednejad, managing director of the Islamic Republic Railways, said on Monday (Aug. 11) that, on average, "500 kilometers of railways have been laid in the country annually" since 2000. Currently they are laying 3,300 kilometers of track, including the 1,000-kilometer Bafq-Mashhad line, which, once finished, will cut by about 900 kilometers the existing track distance connecting Turkmenistan and the entire Central Asia to the Persian Gulf via the Tajan-Mashhad-Bandar Abbas line.

Bandar Abbas is a well-developed Iranian port through which a growing amount of international cargo transaction is conducted. Another major line is a 400-kilometer line connecting the Caspian Sea to the Persian Gulf through the Tehran-Bandar Abbas line. Apart from their position as the main connecting ports between Iran and Russia, the Iranian Caspian Sea ports are becoming increasingly important for their role in expanding regional and international trade between the Caucasus, Central Asia, and Russia.

Iran has an advanced land transportation infrastructure, the result of extensive investment since the early 1960s. Various high-qualities, well-kept highways connect its major trading, mining and industrial regions to each other as well as to neighboring countries, but that includes few railways. Its main lines stretch less than 10,000 kilometers, extremely inadequate for a vast country of 1.64 million square kilometers. Especially since its major ports are along its 2,500-kilometer coastline with the Persian Gulf and the Oman Sea in the south and most of its populous and industrial regions are in the north.

Apart from Iran's plan to expand its international trade, this rapid transport development is also part of a plan to expand economic relations with the newly-independent neighboring Central Asian and Caucasian countries, and also with its main regional partner, Russia.

In particular, Iran's efforts to turn itself into the major transit route for the landlocked Central Asian countries as well as for the two landlocked Caucasian states, Azerbaijan and Armenia, require connecting road and railroads as well as expanding its domestic land transportation network. The idea of restoring the ancient Silk Road by connecting China's roads and railroads to Europe via its neighboring Central Asia and through Iran is another part of its ambition to expand trade.

Yet another factor has been Iran's membership in the Economic Cooperation Organization (ECO). Formed by Iran, Turkey, and Pakistan in the 1980s, the ECO was revitalized when five Central Asian countries, Afghanistan and Azerbaijan, joined it after the Soviet Union's fall. Iran's geography makes it the natural link among all these countries, which are its neighbors or which can access it through a land neighbor (Turkmenistan) or a sea neighbor (Kazakhstan) in the case of three Central Asian countries (Kyrgyzstan, Tajikistan and Uzbekistan).

Finally, Iran's joint project with India and Russia to offer an alternative route for European-Asian trade to the one via the Suez Canal has been a factor. Their land/sea route is both shorter and cheaper.

To meet growing domestic and regional/international demand, Iran is expanding and modernizing its land and sea transportation networks to function as the main regional connecting state for long-term trade routes. Within this context, land transportation, and in particular railway construction is a priority.

Iran is also building a 150-kilometer railroad connecting its eastern Khorassan province with Afghanistan's Herat province, through which it can access other parts of Afghanistan. Since that country borders Tajikistan and Uzbekistan, Iran can also access those Central Asian countries by a shorter link than the current one through Turkmenistan. To that end, last June Iran signed trilateral agreements with each country and Afghanistan. Given Afghanistan's shared border with China, Iran is also considering offering its route to the Chinese in search of a shortcut for their trade with the Middle East and Europe for which highways and

Iran's plans include connecting the Iranian railway network to Iraq and to its neighboring Syria, which would begin after the completion of Bafq-Mashhad, according to Saeednejad. That rail link would enable the Iranians to access the Mediterranean through an alternative route to the existing Turkish one, which is both long and expensive. There are also political considerations arising from Turkey's close ties with the United States and Israel.

It is not clear if the rail track will pass through Iraq's autonomous Kurdish region, which is on good terms with Iran and which, at least theoretically, does not require the American approval or through its non-Kurdish region requiring that approval.

The expanding railway network is creating a market for foreign suppliers, most of which are struggling to survive. The troubled French corporation Alestom has so far supplied 20 locomotives, while 80 more will be assembled in Iran. China is now selling 150 passenger wagons to Iran, although Iran's Pars Wagon Manufacturing produces and exports wagons to countries such as Syria.

Railway cargo handling capacity is growing. According to Saeednejad, in the first four months of the current Iranian year beginning on March 21, Iranian cargo trains carried 10 million tonnes of cargo and 342,000 tonnes of transit cargoes, indicating, respectively, 17 percent and 40 percent increases compared to the same period in the last year. Nevertheless, the Iranian rail network requires rapid expansion to meet growing domestic and international demands, although the highway system compensates, largely, the former's limitation for the time being.

Despite the shortcoming of their rail system, evidence suggests that the Iranians are determined to fully exploit their geographical location as a major source of income, employment, and economic and political influence. If all the existing rail, road and port projects are fully implemented, Iran will certainly become a major transit route for the Asian-European trade on its own merit.

Dr Hooman Peimani works as an independent consultant with international organizations in Geneva and does research in international relations.