Turkey and Iraq are considering commissioning a rail link that would eventually run from Istanbul to the Iraqi port of Al Faw on the banks of the Shatt al-Arab river where it flows into the Gulf. If the project goes ahead, it will considerably improve Iraq’s chances of capitalising on the growing volumes of trade moving along the maritime leg of China’s Belt & Road Initiative (BRI).
Plans to build a major international container port at Al Faw have been on the cards for almost 50 years.They finally began to materialise last December when South Korea’s Daewoo Engineering and Construction signed a $2.6bn deal with Iraq’s state-run General Company for Ports to build the first phase of a giant port there with the capacity to handle three million containers a year.
Al Faw Grand Port’s initial and probably primary purpose for the foreseeable future will be to facilitate the export of Iraqi oil. This is principally destined for China, whose investment in the reconstruction of Iraq’s devastated upstream and downstream infrastructure continues to gather pace. In December, the ZhenHua Oil Company was reported to be finalising a multibillion-dollar deal with Iraq’s state-run oil marketing company (SOM) that would commit the Chinese enterprise to the monthly purchase of 4 million oil barrels, provisionally for the next five years. The following month, Iraq’s Ministry of Oil then disclosed that it was in discussion with Power China and Nerco Chinese for the construction of two refineries at Al Faw.
Baghdad’s decision to develop Al Faw Grand Port is also a response to social unrest and was one of the key demands of protesters in Basra during the anti-government demonstrations that broke out in central and southern Iraq in October 2019. They see the port as key to Basra’s long-term economic prosperity and will presumably be delighted by the prospect of a north-south rail link that could turn Basra into a commercial hub on a new trade corridor between the Middle East and northern Europe that bypasses the Suez Canal.