Iraq is currently in discussions with Turkey to establish an oil-backed fund aimed at financing the ambitious Development Road project. This initiative, as conveyed by the director of the projects department at the General Company for Iraqi Railways, Fadhil Abbas, seeks to create a financial structure that would allow Turkish companies to engage in the construction of this vital trade route that connects the Gulf to Europe.
Details of the Development Road Project
The Development Road is envisioned as a multibillion-dollar infrastructure project designed to facilitate the movement of goods from the Grand Faw Port in Basra to Turkish markets, extending onward to Europe, while also upgrading Iraq’s rail network. Abbas highlighted that the project is currently in the design phase, with ambitions not only to improve freight services but also to enhance passenger transport across various governorates in Iraq.
Abbas noted that the initial phase of the project, which involves upgrading existing rail lines, will be financially supported through a loan from the World Bank. This phase includes critical rail links from Baghdad to the southern cities of Basra and Umm Qasr, as well as extending northward to Mosul. The rail links will eventually connect with the Grand Faw Port and the Turkish border at Fishkhabur, further solidifying trade routes.
Funding and International Interest
Valued at approximately $17 billion, the Development Road is generating significant interest from international investors, particularly from Turkey, Qatar, and the United Arab Emirates. Iraq aims to attract foreign investment to finance the construction, and Ankara has been particularly vocal about an oil-for-financing arrangement. In a recent statement, Turkish Transport Minister Abdulkadir Uraloglu suggested that Iraq could utilize its natural resources to fund the project. This offer aligns with statements from Iraqi Prime Minister Ali Faleh al-Zaidi, who expressed Iraq’s readiness to supply Turkey with substantial daily crude oil shipments.
Furthermore, discussions are progressing on various fronts. In July, Iraq’s Transport Ministry reported the completion of preliminary designs for rail and highway infrastructure, transitioning toward detailed blueprints for essential components like bridges and stations. Al-Zaidi also urged officials to create a financial model that could attract both Iraqi and foreign investors, underlining the urgency and importance of the Development Road project.
Timelines and Future Phases
The project is structured in multiple phases, with the first phase expected to be completed by 2031. Following that, a second phase is projected for completion in 2038, with a goal of reaching full operational capacity by 2050. Recent discussions between Iraqi and Turkish officials also focused on enhancing the Fishkhabur-Ovakoy border crossing, crucial for the success of the trade corridor.
In parallel, the General Company for Iraqi Railways is working on restoring service to the Baghdad-Akashat line, which had suffered damage from previous conflicts. As rehabilitation efforts continue, the status of the Wadi Fatm bridge remains a significant hurdle. Currently, reports indicate that the majority of the western rail network rehabilitation is complete and operational.
In summary, Iraq’s collaboration with Turkey on the Development Road project holds immense potential for boosting trade and improving infrastructure. As negotiations advance and with a structured financial plan in place, both countries are setting the foundation for a transformative venture that could significantly impact economic growth in the region.