Railway projects by India face hurdles in Iran

NEW DELHI: A multi-crore railway project to be undertaken by India in Iran appears to be heading for the same fate as the IPI gas pipeline as differences have arisen over it.

Iran wants the project to be carried out on Build-Operate-Transfer (BOT) basis, which is not acceptable to India as it wants to undertake it on Build-Lease-Transfer (BLT) basis.

In the BOT model, projects are owned by developers who enjoy rights to earn revenue from an asset over a specified period. In the BLT model, the contractor is paid a fixed amount to build the project by the client in installments.

The project, to be undertaken by Rail India Technical and Economic Services (RITES), a subsidiary of railways, involves electrification of track, modernisation of workshop, supply and maintenance of the locomotives in Iran.

RITES, which provides engineering, consultancy, and project management services in transport infrastructure favours constructing the project on BLT model, while Iranian authorities want it to be executed on the BOT model.

"Since the traffic flow is estimated to be low, the BOT model will not be attractive for Indian consortium," said a senior Railway Ministry official.

The proposed railway project include electrification of a railway track between Teheran and Mashhad, Firozkoh and Polesafid and Safiyan-Shabastar in Iran.