Istanbul-Tehran-Islamabad train: political issues behind its stagnation

The Istanbul-Tehran-Islamabad train project would go into service on March 4, but the first trip has been repeatedly canceled. What could be the possible reasons for this situation? According to clients, it was all about accountability and credibility. However, the official freight forwarders of Pakistan Railways have a different story to tell.

Currently, the train’s status is again “pending departure”. Reports from Turkey and Pakistan indicate that a possible departure date would be between 6 and 8 June. However, this cannot be guaranteed. The main problem seems to be the lack of volumes due to political issues in the regions to be crossed. This is to the frustration of those who expected to reserve a space.

Lack of credibility and financial losses

An example of such a customer is the Turkish exporter and shipper TMiT Limited Turkey, which specializes in trading in metals, chemicals and raw materials. Muhammad Mansoor Nasim, managing director of the company, described the obstacles they faced for He spoke of a lack of transparency, communication problems and no credibility on the part of the Turkish or Pakistani government.

Specifically, the misunderstanding is that they expected to book containers from Turkey to Pakistan, but ultimately only had the option to book railcars. Due to their nature of cargo, this would be impossible. In terms of transparency and credibility, the company needed one of the parties to guarantee the security of the service. This could only be done with a letter of credit from Turkey or Pakistan.

Without any of these solutions in place, TMiT Limited delayed shipments and lost excessive amounts of money. Additionally, expecting the service to run smoothly, he canceled his shipping options and found himself with his cargo on hold.

US sanctions on Iran the main problem

The main problem, according to Haroon Brothers & Co, the official freight forwarders of Pakistan Railways, is the restrictions imposed by the US sanctions against Iran. This is why governments could not provide a letter of credit and insurance for the transit of goods through Iran.

In general, the penalties imposed had an impact on the project, according to the transport company, as this was also the main reason why customers exporting to the United States and Europe were reluctant to reserve a seat on the train. , because it would pass through Iran. On the other hand, customers with a regional profile who export locally were not affected by this situation, they explained, but this resulted in too low a volume for the departure of the train.

Haroon Brothers & Co CEO Haroon Khan presents his credentials to HE Tolga Uçak Consul General of Turkey in Karachi, Pakistan.

Freight pricing

Another outstanding argument concerns the price of the service. On its behalf, TMiT Limited complained of higher than normal freight costs, swelling up to 20%. However, Haroon Brothers & Co pointed out that the parties involved in the service have discussed this topic at length and concluded that the pricing model should adapt according to the trade imbalances between Pakistan and Turkey.

Whether these issues are well communicated and understood by all involved is not clear. Each side has its point of view and claims to be right, but the train is still waiting for the departure. Should we expect the train to leave Turkey for Pakistan between June 6 and 8? The answer is once again unclear.

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