On May 27, 2023, Iraq hosted a conference to discuss the Strategic Development Road project, also known as the "Dry Canal." The objective of this project is to connect Al Faw port in Basra, located on the Arabian Gulf, to Turkey and further extend its reach into Europe. The conference was attended by transport ministers and representatives from Iraq's neighbouring nations, including Saudi Arabia, Kuwait, UAE, Qatar, the Sultanate of Oman, Iran, Turkey, Syria, and Jordan. Additionally, representatives from the European Union and the World Bank were also present.
Project Dimensions
The unveiling of the Strategic Development Road project marks a significant milestone in Iraq's endeavour to reposition itself on the global trade and transport map, assuming a prominent regional role in recent times. In this context, several key observations regarding the project can be outlined as follows:
1. Connecting Iraq’s ports with Turkey:
The project encompasses the establishment of rail and road networks, with the aim of facilitating the transportation of goods from Iraq's ports along the Persian Gulf in Basra to Turkey. The designated route traverses the governorates of Basra, Dhi Qar, Qadisiyah, and Wasit before proceeding towards Baghdad. From there, the journey continues through Salah al-Din, Kirkuk, and Nineveh, ultimately reaching the Iraqi-Turkish-Syrian triangle at the Fishkhabour border crossing. Additionally, the project entails the construction of approximately 15 train stations along the way, including the cities of Basra, Baghdad, and Mosul, extending up to the Turkish border and further into Europe and the Caucasus region. Consequently, Iraq will emerge as a pivotal trade and transport hub, facilitating trade flows between Asia and Europe, thus connecting the East and the West.
2. Time savings by 50%:
According to experts, the project will significantly reduce transit times for commercial transportation between Asia and Europe. For example, it is estimated that shipping goods from the Port of Shanghai in China to the Port of Rotterdam in the Netherlands currently takes approximately 33 days. However, utilizing the proposed route, the same journey would only take 15 days, involving transportation from the Port of Shanghai to the Port of Gwadar in Pakistan, then through the dry Iraqi canal to Al Faw port, onwards to the Mediterranean ports in Turkey, and finally to the Port of Rotterdam. This implies a reduction of travel time by more than half, thereby decreasing time and distance, which would benefit the region's supply chains.
3. Achieving significant economic benefits:
According to official Iraqi estimates, the project is projected to cost around $17 billion, with $10 billion allocated for the acquisition of fast electric trains capable of transporting goods in approximately 16 hours. The remaining funds will be utilized for extending 1,200 kilometres of railway lines. The first phase of the project is slated for completion by 2028, followed by the second phase in 2038 and the third phase in 2050. Presently, 40% of the project has been accomplished, with anticipated annual profits reaching approximately $4.850 billion. Moreover, the project is expected to create employment opportunities for a substantial number of young individuals, potentially reaching up to 100,000 positions.
Current Challenges
During the conference, Iraqi Prime Minister Mohammed Shia al-Sudani emphasized the pivotal role of the project as a cornerstone for building a sustainable non-oil economy and its significance as a transformative step towards establishing a robust economic framework. This includes fostering extended regional cooperation and forging strategic partnerships. However, several challenges may arise, which can be addressed as follows:
1. Infrastructure deterioration and corruption spread:
Iraq's infrastructure had significantly deteriorated due to the political conditions following the US invasion in 2003 and the violent confrontations with ISIS when it conquered major parts of Iraq in 2014. This has led to substantial losses in railways, airports, and infrastructure facilities in cities like Mosul and others. Corruption has also spread across various parts of the Iraqi state, hindering the completion of significant projects. One example is the unfinished Al Faw port, which serves as a crucial pillar within the Strategic Development Road project.
2. Potential rejection from Iraqi Kurdistan:
The stance of the Kurdistan region is of vital importance in determining the trajectory of the project, as it can either facilitate its success or impede its progress. Notably, the Kurdistan region has refused the extension of a 4-kilometre railway network through Duhok to the Turkish border, citing concerns related to the Ibrahim Al-Khalil border crossing. This crossing serves as the main gateway between the Kurdistan region, Turkey, and European countries, providing significant economic benefits.
Additionally, the challenging and rocky topographical terrain along the Kurdistan region's border with Turkey presents an additional obstacle. Implementing railway networks requires flat terrains, which are incompatible with the natural landscape of that region. Estimates suggest that if the project includes areas within the Kurdistan region, the projected completion timeline may extend to approximately six years, surpassing the initial 4-year timeframe.
Moreover, the overall cost may increase to $20 billion instead of the initial estimate of $17 billion. These factors pose difficulties to the project's implementation. Furthermore, an alternative route passing through Mosul, Rabia in the Nineveh Governorate and onwards to Syria and Turkey faces a major obstacle due to high transit fees imposed by Damascus. These fees, amounting to approximately $8 per train passage, surpass the global rail transport price of $3 and are expected to significantly reduce Iraq's project revenues.
3. Caution expressed by Iraqi political forces:
Iraqi political forces and blocs hold divergent opinions regarding the project, particularly within the coordination framework. Some express scepticism and suspicion towards the initiative, primarily due to the volatile nature of Iraq's relations with neighbouring countries, notably Saudi Arabia. For instance, Mohammad Al-Shammari, a representative of the State of Law Coalition, stated that the project would primarily benefit Saudi Arabia rather than Iraq, as it serves as the main passageway for the initiative. Additionally, the project passes through multiple provinces controlled by certain Shiite armed groups. This, combined with potential opposition from Iran, raises concerns about deliberate interference or threats that could impede the project's advancement.
4. Objection from regional states:
Despite aiming to foster regional cooperation, the project may encounter obstruction from certain parties who perceive it as a potential competitor to their ports and transit routes on an international scale. This concern arises from the project's emphasis on the significant Al-Faw port, which could potentially undermine the Iranian line of Abadan. As a result, these parties may actively work towards impeding the project's progress.
This project highlights the Iraqi government's efforts, led by Al-Sudani, to diversify regional relations and stimulate economic growth. These efforts aim to strengthen the government's position in the face of domestic political pressures, particularly within the coordination framework, as well as external pressures from Iran. While ambitious, the project still faces significant hurdles that must be addressed. Key among these are the challenges of financing, securing cooperation from neighbouring countries, and overcoming internal obstacles. These tasks may prove to be formidable.
