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Iran wants to take over Iraqi and Syrian cargo flow with Latakia port & railway line

Latakia, Syria (PortSEurope) July 16, 2019 – Iran, Syria and Iraq are discussing the construction of a railway line connecting the Iran’s Imam Khomeini Port in the Persian Gulf, via Iraq, with Latakia port on the Mediterranean Sea, which from October will be leased by Iran.

The three states, heavily affected by civil war, sectarian conflicts and international embargoes, are looking ways to increase dramatically the cargo flow between them. Iran, which is pushing for the linking of the two ports, is to finance the railway section between the Iranian city of Shalamja and the Iraqi city of Basra, the agreement for which was signed during the visit of Iranian President Hassan Rouhani to Iraq in March.

The planned railway discussion involved the heads of the three countries railway administrations Najib al-Fares from Syria, Saeid Rasouli (Iran) and Taleb Jawad Kazem (Iraq). 

Iran’s leasing of the container terminal in Latakia port, will allow it to gain a highly strategic foothold in the Eastern Mediterranean, 322 km by sea from key Israeli port of Haifa. Israeli media claim that Iran operates a precision missile factory on the outskirts of Latakia and very close to Russian Khmeimim Air Force Base in Syria. Iran is also working on the construction of a power plant in Latakia.

State-owned Latakia is Syria’s main commercial port. Its harbour is 135 hectares, has 32 wharfs, 18 cranes, its channel depth is 14.5 metres, the warehouses cover 62.8 hectares and can handle some three million tonnes of cargo a year.

In 2009, CMA CGM signed a concession agreement with Latakia Port General Company (LPGC) to manage and operate the container terminal for a period of 10 years (extendable to 15 years). The terminal is operated by a consortium composed of CMA CGM/Terminal Link (51%), and Souria Holding (49%), a Syrian limited liability company.

It is rumoured that Russia was against the lease of Latakia port of Iran, but Teheran has provided the Syrian government with billions of dollars of credits and significant fuel supplies. Despite their cooperation, the rivalry between Tehran and Moscow is becoming visible in post-civil war Syria.

Iran has been repeatedly asking Syria for access to its ports, due to Israeli airstrikes against its shipments via Syria’s roads and airports, but under Russian pressure, Damascus did not co-operate. Now, Teheran will have its own port which will help Iran move goods (according to Israel, also weapons) towards Lebanon.

It is believed that companies linked to Iranian Revolutionary Guard have already started using the port of Latakia, which would become the Mediterranean link on an emerging trading route through the so-called Shia crescent from Iran through Iraq.

The Shia Crescent (Shiite Crescent) is the notionally crescent-shaped region of the Middle East where the majority population is Shia or where there is a strong Shia minority in the population. 

Syria also signed in April a 49-year investment contract with Russian company Stroytransgaz for the expansion and operation of its port of Tartus. A total of $500 million (€449.5 million) will be invested in the reconstruction of the port, including the expansion of the port in the north and the construction of new infrastructure. As a result, its handling capacity should increase from the current 4 million to 38 million tonnes per annum.

In 2017, Russia and Syria signed an agreement on the deployment of the Russian Navy logistics station for 49 years in Tartus. The use of the port will gives Russia influence over eastern Mediterranean. It also allows the Russian Navy to expand its technical support and logistics base, located on the northern edge of the port of Tartus.

Tartus is the Russian Navy’s only Mediterranean port facility, sparing Russia’s warships the trip back to their Black Sea bases through the Bosphorus Strait and its only overseas base. In the Syrian civil war, Russia sided with and saved the regime in Damascus.

The Tartus military facility can currently accommodate up to four medium-sized vessels but only if both of its 100 m floating piers are operational. Russia also has a fortified air force base in Khmeimim, near the port of Latakia.

OAO Stroytransgaz is a Russian engineering construction company in the field of oil and gas industry, and controlled by Gennady Timchenko though the Volga Group SICAV SIF SA fund. Timchenko is from the inner circle of Russian President Putin.

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