Tehran, Jan 5 (IANS): Iran and Russia have signed a contract for building a cargo ship for the Caspian Sea port of Solyanka.

According to a local media report, the Russian side will manufacture a cargo ship for Iran to be used at Solyanka, which is located in the southern Russian city of Astrakhan and jointly developed by the two countries, reports Xinhua news agency.

The order, which has been placed by the Islamic Republic of Iran Shipping Lines (IRISL), aims at "strengthening the transportation network of the Caspian Sea" and renovating the IRISL fleet, Mehdi Akuchakian, Iran's consul general in Astrakhan, was quoted as saying at the signing meeting with the Russian port officials.

He said the vessel would be capable of carrying all kinds of cargo, indicating that the contract would boost trade and commercial relations between Iran and Russia.

"It will have a positive effect on the reduction of the final price of Iranian and Russian export goods, and as a result, the quality of life of the people of the two countries will improve," Akuchakian added.

To develop the North-South Transport Corridor, which links India to Central Asia through Iran, it is necessary to provide more ships and strengthen the infrastructure of port services, Akuchakian noted.

The IRISL is investing $10 million in the Solyanka port, part of which has been funded through Russian banking loans.