Millions of pilgrims in Iran could be speeding their way to the holy Shia shrine of Mashhad at 250mph (400km/h) on an air-conditioned, high-tech train built in Germany.

That, at any rate, is the aim of a deal struck between the Iranian transport ministry and a German engineering consultancy. If the plan is realised, the image of the pilgrim as a dusty footsore wanderer will have to be revised radically: the magnetic-levitation (maglev) train can cover the 800km (500 mile) journey to the shrine in just over two hours. Up to 12 million Muslims travel to the shrine every year.

The timing of the announcement by the Munich-based Schlegel company could not be more sensitive. Within a week President Bush will be urging leaders of the G8 nations to tighten sanctions against Iran in an attempt to halt its uranium-enrichment programme.

“The transportation of pilgrims is certainly not a project that would fall in the remit of a political boycott,” said Otto Wiesheu, a member of the board of German Railways, which is backing the Iranian scheme. Before joining the board Mr Wiesheu was economics minister of Bavaria and visited Tehran in 2004 to discuss how the Germans could help to develop Iran’s transport system. That was when the maglev deal was hatched. Siemens, which makes much of the technology of the train – known as the Transrapid – has its headquarters in Bavaria.

The Transrapid hovers above a raised magnetic track. It was intended originally to link Berlin with Hamburg but was scuppered by opposition from environmentalists.

Hopes were then pinned on China, and a Transrapid link was built between Shanghai and its airport. But the Chinese news agency Xinhua this week signalled that the authorities were freezing plans to extend the maglev line more than 100 miles to the town of Hangzhou, apparently because of protests from locals who live close to the track.

The Iranian project is viewed as a big chance by the Germans, desperate to show the world that they have developed a commercially viable technology. The Iranians, for their part, appear determined to make the Shia shrine easily accessible to believers across the region.

Currently, it takes 14 hours by train from Tehran or two days by bus. A German company has also been signed up to prepare a feasibility study on expanding the overburdened Mashhad airport. Two problems could thwart the train project. International sanctions – above all, the freezing of foreign accounts – are already making it difficult to do business with Iran. Germany exported more than €4 billion (£2.5 billion) of goods and services to Iran last year but most of the deals were the result of long years of arduous bargaining. If the US leads a further stiffening of sanctions the maglev train could become a distant dream.

“Iran is without doubt a difficult country,” Mr Wiesheu admitted yesterday. “I do hope though that the international relations will improve.”

The second problem is that financing may prove difficult. More than €6 billion will be needed to build the track. Iran is making €1.5 billion of start-up money available from the Iran Oil Fund which manages the country’s oil revenues. That would entail a big long-term investment by Germany in a country once deemed by the Bush Administration to be part of the “Axis of Evil”.

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