Vladimir Yakunin, chairman of Russia's state-run rail network

YEREVAN (RFE/RL)—Russia remains interested in an ambitious project to build a railway connecting Armenia to neighboring Iran despite “problems” created by Tehran’s deepening standoff with the West, according to the head of the state-run Russian rail network, RZD.

“We think that this project has realistic chances of implementation but that could be done only within the inter-state framework and doesn’t depend only on us,” Vladimir Yakunin said at the end of a visit to Armenia late on Wednesday.

Yakunin arrived in Yerevan to introduce Viktor Rebets, the new executive director of Armenia’s national railway company managed by RZD. He also met with President Serzh Sarkisian.

The Armenian and Iranian governments officially approved the railway project in 2009. But they have yet to identify concrete sources of funding for the 470-kilometer rail link that would mainly pass through Armenian territory. Unofficial estimates of its total cost have varied from $1 billion to $4 billion.

The Armenian side hopes that Russian firms will participate in the railway construction and partly finance it. The Russian government and RZD have not ruled out such possibility.

The Armenian and Russian transport ministries set up joint working groups looking into the project after Russian President Dmitry Medvedev’s August 2010 visit to Yerevan. Medvedev and Sarkisian also discussed the issue when they met in Moscow in October 2011.

“We hope that with joint efforts by both Russia and Armenia as well as some third countries we will, after all, manage to achieve a more modern and perhaps even radically new system of communications for Armenia,” Medvedev said during the talks in an apparent reference to the would-be rail link.

Yakunin insisted that the project is feasible even though between 30 and 50 years would be needed to recoup the massive construction expenditures. “And if that project is launched South Caucasus Railway will definitely participate in its implementation,” he said, referring to RZD’s Armenian subsidiary.

The Russian official noted that the tightening international sanctions against Iran are creating “quite a bit of problems” hampering economic cooperation between the Islamic Republic and other regional states, including Armenia. “We believe that cooperation is much more effective than any sanction imposed on Iran,” he said, echoing Moscow’s official stance on the standoff over Tehran’s controversial nuclear program.

The Armenian government regards China as another potential source of funding for the railway construction. Transport Minister Manuk Vartanian revealed in 2010 that Yerevan is seeking as much as $1 billion in Chinese loans for that purpose.

Chinese Foreign Minister Yang Jiechi discussed the issue with Prime Minister Tigran Sarkisian during a February 2011 visit to Yerevan. Sarkisian’s press office referred to “the Chinese side’s interest” in the project but did not elaborate.