Tehran City Council has ratified a motion allowing Tehran Municipality (TM) to raise 35 trillion rials ($110.4 million) in participatory bonds for streamlining public transportation in the current fiscal year that ends next March.
Meysam Mozaffar, head of the Tehran City Council’s budget committee, made the announcement after a meeting of the TCC on Sunday, ISNA reported.
Mozaffar said “21 trillion rials ($66.2 million) is to be used for completing the construction of subway lines and 5 trillion rials ($15.7 million) for overhauling the public transportation network.”
The remaining amount will be used to improve the capital’s ageing public bus fleet.
Law stipulates that repayment of bonds is guaranteed jointly by municipalities and the government’s Plan and Budget Organization.
Tehran’s subway network stretches over 220 kilometers and comprises seven lines (1 to 7) with nearly 120 stations. Lines 3, 4, 6 and 7 are under construction.
Three new lines are in the pipeline for areas in the fledgling capital lacking access to the subway but have yet to be approved by the High Traffic Council.
The subway system lacks 3,000 train cars to handle 10 million daily travels. Around 1,300 train cars are in service of which 30% need renovation.
According to the Tehran Bus Company, of the total 6,000 buses operating in the transport fleet, nearly 70% are dilapidated and in use for over 12 years.
The old buses have technical flaws and cause inconvenience to passengers, apart from worsening air pollution in the city home to 12 million people.
TM expects the number of commuters to surge by 25% after subway lines 6 and 7 are up and running, and more buses join the public transportation fleet.
Apparently this is not enough for Tehran where, according to pre-coronavirus statistics, over 10 million people commute daily, many from the surrounding cities and towns.
Tehran is not the only city struggling with lack of decent public transport. Reports say Isfahan, Mashhad, Alborz and many other metropolises are also grappling with the same problems.
Recent Bond Data
Municipalities in big cities sold 114.7 trillion rials ($370 million) participatory bonds in the last fiscal year. This was more than double on an annualized basis (106.8%) according to Central Bank of Iran data.
Municipal bonds are debt securities issued by municipalities to fund urban development projects. Bonds were sold by municipalities in Tehran, Mashhad, Isfahan, Ahvaz, Tabriz, Karaj and Shiraz for expansion of rail networks, pathways, rehabilitating urban structure and developing Bus Rapid Transit (BRT) systems.
Citing data released by the Securities and Exchange Organization, the CBI said in June that municipalities sold 18.2 trillion rials ($58.7m) bonds in the first month of the current fiscal year.
The debt was sold as per provisions of the fiscal budget. On where the funds from bond sales would be used, Masoud Nosrati, Iranian Municipalities and Rural Management Organization’s deputy for developing and managing affairs, earlier said municipalities are allowed to sell 50 trillion rials ($161m) bonds for completing railroad expansion projects.
In addition, 20 trillion rials [$64m] was for expanding urban transportation and developing BRT networks in the big cities.
