Major automaker Iran Khodro Company (IKCO) has restarted bus production lines after a long-drawn lull to meet Tehran’s demand for new public transport vehicles.
Mohammad Zali, the CEO of Iran Khodro Diesel, an IKCO subsidiary, said the production lines are running at lower capacity to deliver 620 buses and minibuses to Tehran Municipality, YJC reported.
The delivery is part of an agreement worth 4 trillion rials ($15.56 million) signed by Tehran Mayor Pirouz Hanachi and IKCO’s CEO Farshad Moqimi in June.
As per the contract, IKCO is to deliver Euro-4 diesel buses with catalytic converters and Euro-6 liquid petroleum gas buses, along with high-quality minibuses. TM and Tehran Bus Company have bankrolled the project.
Zali said the automaker is committed to delivering the vehicles in phases.
“By early November, 40 LPG and diesel buses were inducted into the capital’s transport fleet. Domestic production of the vehicles cuts capital flight and creates jobs for 1,700 people,” he added.
In addition to the contract, the two sides have also signed a memorandum of understanding to produce 800 more buses by the end of the current Iranian year (March 2021). The government and TM will line up finance for this initiative.
With only a quarter remaining to reach the due date, however, it is doubtful that the agreed number of buses will be ready on time.
Zali noted that Iran Khodro Diesel can annually manufacture 5,000 buses in full capacity, provided it is subsidized.
“Besides the capital city, Khorasan Razavi, East Azarbaijan and Sistan-Baluchestan provinces have also requested local vehicles. IKCO is willing to forge deals with municipalities and start production,” he added.
Earlier speaking to reporters, Hanachi said Tehran faces huge shortfalls in its public transportation system and the new vehicles will partially fill the gap. He hoped collaborations between TM and the state automaker will expand.
Renewal Plans
Besides boosting local production, officials have resorted to repairing dilapidated bus fleet as a cost-effective choice to streamline the public transportation system in the Iranian capital.
Last week, Tehran Bus Company and the Industries Ministry reached an agreement to restore 1,000 dilapidated urban buses under a long-term scheme.
Mahmoud Tarfa, the head of TBC, said the plan, which initially targets 100 privately-owned buses in the capital, will be implemented as soon as the financial details are determined.
“The complete restoration of each single-deck bus requires 4 billion rials [$15,560] and that of a double-deck bus costs 7 billion rials ($27,230). The scheme also envisages the restoration of an additional 1,000 buses in other Iranian metropolises,” he said.
Stressing that only 40 buses were overhauled during the last Iranian year (ended March 19, 2020), the official noted that to compensate for the slow pace of restoration plans and the sluggish addition of new vehicles to the transportation fleet, TBC is making a complementary effort.
Tarfa said whenever funds become available, the company repairs and reuses old buses that have been phased out of the fleet in recent years.
“The Interior Ministry has emphasized that the number of buses operating in the metropolis should not decrease. Considering the city’s dense population, it would cause serious disruption in the commutation of a large number of citizens,” he said.
Similarly, the Plan and Budget Organization has started a joint move with mayors of 68 cities and Omid Entrepreneurship Fund to overhaul 5,000 dilapidated urban buses nationwide.
Based on a deal signed in mid-November, the fund will pay cheap loans worth 2.24 billion rials ($8,710) to bus owners. The loans will be offered with a 4% interest rate and a repayment period of five years.
The remaining expenses are to be covered by municipalities and owners. Further details will be announced by the authorities later.
“Of the total number of buses covered by the scheme, 1,700 will be revamped in the capital city of Tehran and Isfahan, 1,600 in Karaj, Ahvaz and Kermanshah, and the rest in other cities,” Hamid Pour-Mohammadi, a PBO deputy, said.
The restoration scheme is expected to improve public transportation services in metropolises, increase the sector’s employment rate, improve ventilation systems that benefit passengers, especially during the Covid-19 outbreak, help curb the suffocating air pollution, increase the efficiency of fuel consumption and boost transportation safety.
Hard Economic Times
In view of the economic hardships facing Iran due to the reimposition of US sanctions, the renovation of 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 257,000 rials in Tehran while it hardly fetched 42,000 rials in March 2018.
Following the 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 the timely allocation of funds will ensure these efforts yield the desired result.
