The World Bank has approved a $930 million financing package to enhance Iraq's railway system, aiming to improve domestic trade, create jobs, and diversify the economy. The Iraq Railways Extension and Modernization (IREM) Project will upgrade the railway infrastructure from Umm Qasr Port in southern Iraq to Mosul in the north. This development is expected to reduce travel time, increase freight volumes, and provide better access to sustainable transport services.
The Middle East is experiencing a revival of regional railways, which is strengthening trade routes within the region and with Asia and Europe. The Iraq Development Road (IDR), announced in May 2023, aims to transform Iraq into a key transport hub by connecting the Gulf region through Iraq to Turkey and further into Europe. Jean-Christophe Carret, World Bank Middle East Division Director, stated that "enhanced trade and connectivity can stimulate growth, create jobs, and reduce oil dependency."
The IREM project involves rehabilitating 1,047 km of railways linking Umm Qasr Port to Mosul via Baghdad. It will address issues with aging locomotives and rolling stock, refurbish maintenance facilities at Baiji, and procure necessary equipment. The project will also encourage private investment in dry ports and logistics hubs while creating high-skill jobs. Safety improvements include a comprehensive Safety Management System and community awareness campaigns.
Technical assistance will be provided to improve the performance of Iraqi Republic Railways (IRR), including developing a Railway Sector Reform Action Plan. Training for IRR staff will support women's participation in the rail sector. The Ministry of Transport will oversee project implementation with an internationally recruited firm acting as a Capital Expenditure management agent.
By 2037, it is anticipated that the upgraded railway line will handle 6.3 million tons of domestic freight annually along with significant passenger traffic. This initiative is expected to benefit approximately 17 million people across eight governorates by improving integration within federal Iraq. The shift from road to rail transport is projected to reduce road damage costs significantly.
The project is set to create over 3,000 full-time construction jobs for seven years during its execution phase. Once operational by 2040, it is expected that up to 21,900 jobs could be created annually as part of ongoing railway operations.