On November 27, 1899, the Germans were given a definite concession to extend the railway (From Berlin) to Baghdad. Included in the concession were guarantees of a certain revenue per kilometer of track laid–the so ­called Kilometer Guarantees–and carefully worded provisions spelling out German rights to establish and operate irrigation projects, harbors, and various industries along the right of way. To back up the Kilometer Guarantees, certain state revenues in certain districts of Turkey were assigned to the railway.

The British, fearing the possibility of a German naval base on the Persian Gulf, made a protectorate out of Kuwait by agreement with the Sheik of Kuwait (1899). This effectively barred the Railway from a southern terminus on the Gulf. The result was that Basra, on the Shatt-al-Arab (the confluence of the Tigris and the Euphrates Rivers) 60 miles north of the Gulf, became the proposed terminus. The line as projected, therefore, ran from Constantinople to Basra–a distance of 1,200 miles.

Source: The Berlin-Baghdad Railway as a Cause of World War I by Arthur P. Maloney, New York University, 1959. p. 7