In late June, the World Bank announced a 930 million dollar grant for the so-called Iraq Development Road. It would constitute a whole new rail corridor for goods to reach Europe from Asia (and vice versa). It also aligns perfectly with the ambitions of Iraq’s neighbour Türkiye to become a regional logistics hub. Despite the near-billion dollar grant and growing trade with the Turks, the project remains in a very early stage, and Turkish involvement is limited, for now.
“The Development Road is designed as a land and railway corridor linking the southern Iraqi port of Al-Faw to Europe via Türkiye”, explains Turkish rail association DTD. “The route will start from the Gulf and proceed through Basra, Baghdad, and Mosul, entering Türkiye and continuing to Europe via the Mersin–Istanbul corridor.”
If implemented, the Development Road could have a substantial impact on logistics in the region. “The true strategic value of the Development Road lies in its ability to establish an alternative transit axis connecting the Arabian Gulf to Europe”, says the Turkish rail association. The corridor is supposed to be eight to ten days faster than the Suez Canal, offer a cost-effective land transport corridor from the Middle East, Gulf and East Africa to Europe, all the while giving Türkiye a central position in reshaped logistics.
“Thus, the Development Road is being positioned as a multimodal, strategically important logistics corridor connecting Iraq, Türkiye, Europe, the Gulf region, the Caucasus, and Central Asia”, summarises DTD.
In concrete terms, the World Bank investment aims to:
• Rehabilitate and modernise 1,047 kilometres of key railway lines linking Umm Qasr Port, Baghdad, and Mosul.
• Upgrade rolling stock and maintenance capacity, including fleet renewal, refurbishment of the Baiji workshop, and procurement of equipment and spare parts.
• Enhance railway safety through infrastructure upgrades, a new Safety Management System, level crossing improvements, staff training, and community awareness.
• Boost private sector involvement by enabling investment in dry ports, logistics hubs, and broader rail operations.
• Strengthen the institutional performance of Iraqi Republic Railways (IRR) with technical assistance and a Railway Sector Reform Action Plan.
• Promote workforce inclusion, including training for IRR staff and initiatives to support women’s participation in the rail sector.
The 2024 memorandum
The corridor could prove to be greatly beneficial to Türkiye, which is already trying to claim its place in international logistics. For example, it hopes to attract more transit goods via the Middle Corridor. The Development Road could add to that, and official policy reflects those hopes: “Türkiye is participating in the Development Road Project as a strategic partner. The project was formalized on April 22, 2024, through a quadrilateral memorandum of understanding signed by Türkiye, Iraq, Qatar, and the United Arab Emirates”, explains DTD.
“From a railway logistics perspective, Türkiye places particular emphasis on the rail infrastructure component and supports the planning of new railway lines that would enable a direct rail connection with Iraq.” No such rail connection currently exists between the two countries, and the road border crossing is riddled with issues: “Limitations in border capacity, slow customs procedures, and inconsistent transit times continue to present serious bottlenecks.”
Moderate expectations required?
Strategically, the value of the corridor is clear. Turkish official policy and the World Bank’s investment underline that there is something real to gain. But at the same time, there is also reason for moderate expectations. The World Bank has projected that the rail line will carry 1,1 million tonnes of international freight by 2037, and 6,3 million tonnes domestically. Those are no staggering numbers.
Additionally, there have been no formal investment agreements by Turkish private companies. But, as points out DTD, “preparatory efforts are ongoing to ensure their involvement. Turkish investors are expected to play a key role in areas such as construction, railway technologies, logistics services, and terminal operations.”
“The project is currently in the planning stage, including route analysis and technical feasibility studies. As such, fieldwork and physical investments have not yet begun.” Turkish companies are supposed to be closely watching the situation, hoping to jump onto business opportunities. Iraqi authorities have also said that Turkish contractors will get priority during the implementation phase.
Future supply chains
On the other hand, the World Bank projection could also understate the potential of the railway. “The Development Road is not only a tool for handling current cargo flows; it is a long-term strategic infrastructure investment that will help shape future supply chain scenarios in the region”, explains DTD. In other words, it can induce logistics patterns in the area.
What is key, according to the Turkish association, is this intermodal transport infrastructure between Türkiye and Iraq gets a boost. Moreover, logistics centres, ports and industrial zones should be integrated into the project. Block train operations and digital customs procedures need to be expanded, and there needs to be larger institutional capacity and technical training for railway operations in Iraq.
There is a lot to be done, and there are reasons for both early optimism and moderate expectations. But with already well-developed and growing trade between Türkiye and Iraq (turnover amounted to 19,9 billion dollars in 2023, and growing by nearly a quarter in early 2024), there is a growing base for transport demand.