Head of the International Affairs Office at Iran’s Ministry of Roads and Urban Development (MRUD) Amin Tarfa made the remarks on Tuesday that land acquisition for the Rasht-Astara railway is expected to be completed by late 2025, allowing its Russian contractor to immediately start its work on the project.

Tarfa’ said that the Russian contractor had already taken control of 35% of the land acquired for the project, Press TV reported.

He said that the Caspian Service, a Russian investment and construction company, will be responsible for building the Rasht-Astara railway, adding that the client in the project will be Iran’s Construction and Development of Transportation Infrastructure Company (CDTIC), which is a subsidiary of the MRUD.

The start of construction in early 2026 will mark the official launch of Russia’s $1.6 billion loan to finance the project, Tarfa’ said. He added that the Russian government will disburse funds gradually, in line with the project’s progress.

Iran’s estimates from January 2025 show that it would need to spend some $75 million on land acquisition for the railway.

The financing and construction agreement for the project was signed in May 2023 between former Iranian President Ebrahim Raeisi and Russian President Vladimir Putin.

Russia views the 162-kilometer railway as a key link on the International North-South Transport Corridor (INSTC), a major trade route that connects the Indian Ocean to the Baltic Sea. Some experts believing that it can even rival the Suez Canal.

Tarfa’ also said that Iran will repay the Russian loan over 10 years at an interest rate of 3%.