A deal backed by the government worth 10 trillion rials ($51 million) has been signed by Tehran Municipality and Iran Khodro (IKCO) to add 230 buses and minibuses to the capital city’s public transportation fleet.
During a Saturday visit to IKCO’s bus production line, Tehran Mayor Pirouz Hanachi and IKCO’s CEO Farshad Moqimi signed the deal on delivering 110 buses and 130 minibuses to the municipality, the automaker’s news website Ikcopress.ikco.ir reported.
The automaker is committed to start delivering the vehicles within a month.
A memorandum of understanding was also signed by the two sides on the production of 800 more vehicles by the end of the current Iranian year (March 2021). This initiative is to be financed jointly by the government and TM.
As per the MoU, the carmaker has agreed to deliver 300 minibuses and 500 buses, 100 of which will be electric and 400 will run on CNG and diesel.
Speaking at the signing ceremony, Hanachi said, “Tehran faces huge shortcomings in its public transportation system. The new vehicles are expected to partially fill the gap.”
He acknowledged the government’s timely help and hoped collaborations between TM and the carmaker company will expand.
Moqimi expressed readiness to strengthen bilateral ties and said “there are no worries about production capability”.
Noting that the company’s bus production line is to resume work after a decade-long halt, Moqimi said IKCO and its five affiliated firms will produce the agreed number of vehicles with full capacity.
“TM is also planning to restore some 1,000 dilapidated buses currently working in the city’s transport fleet. Hanachi said, adding that IKCO will definitely take a share of this work.
Earlier Measures
Streamlining the ailing public transportation system in Tehran has long been a point of concern for the city’s urban managers.
Last year in July, TM signed an agreement with Omid Entrepreneurship Fund to allocate 12.5 trillion rials ($63.7 million) in cheap loans for the expansion of public transportation system in the capital.
Replacing smog-inducing motorcycles with electric bikes, expanding biking facilities, providing vehicles with pollution absorbents and high-quality catalyst converters, and upgrading air quality monitoring equipment and devices were also on TM’s agenda.
Additionally, in mid-June 2019, 13 buses and 117 minibuses produced by domestic automakers, such as Iran Khodro, Bahman Khodro and Sabalan Khodro, were inducted to upgrade the aging public transportation network of Tehran.
Last summer, TM announced that it started restoring 500 dilapidated buses that have outlived their usefulness.
“Inefficient public transportation fleet is one of the worst problems afflicting the residents of Tehran. Addressing the issue is high on the municipality’s agenda,” Hanachi said at the time.
While such positive measures are gaining momentum, they are not effective because of the growing number of dilapidated buses plying the streets of Tehran.
According to Tehran Bus Company, 6,500 buses are operating in the transportation fleet of Tehran, more than half of which are a wreck. This is while the capital needs at least 9,000 buses to offer decent transportation services to the public.
Economic Headwinds
Considering the economic hardships facing Iran due to the reimposition of US sanctions, the renovation of the transportation fleet has become difficult.
The price of new passenger vehicles and eco-friendly motorcycles has seen a threefold jump, just like any other commodity.
After US President Donald Trump reneged on Iran’s nuclear accord and reimposed sanctions against Tehran last summer, the Iranian rial lost almost 70% of its value over the past year.
On Monday, the US dollar was traded at 196,000 rials in Tehran while it hardly fetched 42,000 rials in March 2018.
Following the reimposition of sanctions, many foreign suppliers of vehicles and parts suspended collaboration with Iranian firms. The country cannot afford to import new buses in large numbers and local manufacturers do not have an adequate volume of parts to boost production.
These factors have derailed schemes for overhauling the transportation fleet. However, with the help of the government and automakers, urban planners are devising solutions to implement these schemes.
The commitment of officials concerned and timely allocation of funds will ensure these efforts yield the desired result.
