Talks between Iraq and Iran to build a short railway link between the southern port city of Basra and the town of Shalamjah, just across the border, are nearing completion, according to a tweet from the office of Mustafa Al-Kadhimi, Iraq’s prime minister.

Although the line would run for only 30km and cost around $150m, it would be the only rail connection between the two countries and would vastly improve communications in the wider region by connecting China’s Belt and Road lines to Iraq and bringing Iran closer to Syria.

The office of the Iraqi prime minister tweeted on Thursday: “The negotiations with Iran to build a railway between Basra and Shalamjah have reached their final stages, and we have signed 15 agreements and memorandums of understanding with Jordan and Egypt regarding energy and transportation lines.”

Funding for the project, which was approved by the Iraqi cabinet in April, will come from Iran's Mostazafan Foundation, which is described as a “semi-government charity”.

The link, which has been discussed for many years, was first announced in November 2018, when Islamic Republic of Iran Railways (RAI) announced that it hoped to build a line between the two cities.

The Al-Monitor news site reported at the time: “The railway is part of Syria’s reconstruction deal … promoting religious tourism among Iran, Iraq and Syria. Syrian opposition parties, however, have rejected the railway, believing it will entrench Iranian influence and help provide the logistic services necessary for its presence in Iraq and Syria.”

Iran’s IRNA news agency reported that Iraj Masjidi, Tehran’s ambassador to Baghdad, argued that the rail line could make Iraq a regional transport hub.

He said Iraq could become one of the “largest transit countries in the region”, and that “Iraq can be connected to China through the railways of the Islamic Republic of Iran and increase its strategic importance in the region”.

Masjidi also suggested that the rail line could lead to an expansion of Basra’s port facilities. He said: “Now only small ships can dock in this port, but the development and equipping of the port along the dredging of the Arvand River can change the situation and help the port prosperity and ‘Transit Iraq’.”