Tehran is hosting the Ninth International Exhibition of Rail Transportation, Equipment and Related Industries.
The four-day event, held at Tehran’s International Fairground, will conclude on May 27.
A total of 90 domestic companies, four foreign companies and 19 knowledge-based firms are participating in this expo to showcase their products and services over an area of 7,000 square meters, of which 1,167 square meters pertain to knowledge-based companies, IRIB News reported.
The event has been organized for promoting marketing, innovations and sharing of experiences between the public and private sectors, in addition to signing contracts.
Visitors can tour the expo from 8 a.m. to 3 p.m.
Referring to shortage of locomotives in Iran’s rail sector, Miad Salehi, the CEO of the Islamic Republic of Iran Railways, said Iran intends to venture into joint production of locomotives with Siemens.
A History of Siemens in Iran
Siemens is a German multinational conglomerate and the largest industrial manufacturing company in Europe headquartered in Munich with branch offices abroad. Its transportation and logistics-related products include equipment and systems for rail transportation, including rail vehicles for mass transit, regional and long-distance transportation, locomotives, equipment and systems for rail electrification, central control systems and automated train controls; equipment and systems for road traffic, information and guidance; equipment and systems for airport logistics, including cargo tracking and baggage handling; and equipment and systems for postal automation, including letter parcel sorting.
Siemens is perhaps one of the most proactive German firms in pursuit of opportunities in Iran after January 2016 when Tehran and the world powers implemented a deal they had reached earlier to resolve a longstanding dispute over Iran’s nuclear program.
The company was present in Iran after it built the Indo-European telegraph in the 19th century. It officially stopped doing new business in the country in 2010 when international economic sanctions were tightened against Iran, but continued to service existing contracts as long as they did not contravene the sanctions.
Siemens cooperated with Iran’s major industrial conglomerate MAPNA Group for years. It signed a contract with the Iranian giant in 2011 to supply 150 locomotives to the Islamic Republic of Iran Railways. MAPNA successfully acquired the technology and delivered the order in time.
MAPNA signed a preliminary deal in October 2016 with Siemens to manufacture 50 diesel electric locomotives for passenger trains. Another agreement was signed for the joint manufacture of 70 electric locomotives to be used in the 926-km Tehran-Mashhad railroad.
IRIR and Siemens’ transportation subsidiary Siemens Mobility signed several memoranda of understanding to develop Iran’s railroads.
The agreements concerned electrification of Tehran-Mashhad railroad and Tehran-Isfahan high-speed train, supply of 500 wagons, development of Iran’s railroad infrastructure and provision of consultation and technology.
In 2018, the German industrial manufacturing giant said it was scaling back its Iran business after the reimposition of economic sanctions by the United States, Germany's public international broadcaster Deutsche Welle reported.
The Munich-based company explained it would take appropriate steps "to bring business activities in Iran in line with the changing multilateral situation".
Siemens said it would continue to ensure compliance with all export restrictions and regulations "including US secondary sanctions.”
In 2018, Washington unilaterally quit JCPOA that it had signed with five other countries and Iran, and reimposed sanctions against Tehran.
Talks started in the Austrian capital Vienna in April 2021 to restore the deal, formally called the Joint Comprehensive Plan of Action, which offered sanctions lifting to Iran in return for curbs on its nuclear program.
After months of negotiations with major progress in most areas of difference, Vienna talks were halted in March over a few remaining issues and diplomats returned to their capitals.
Vienna talks are facing an impasse over two key issues, including the terror designation of Iran’s Islamic Revolution Guards Corps and a list of sanctions on real and legal persons, according to Vahid Jalalzadeh, the head of the Majlis National Security and Foreign Policy Commission.
Iran demands the delisting of IRGC from the list of terror organizations, describing it as a component of the maximum pressure campaign imposed by the former US administration after its withdrawal from JCPOA.
Washington refuses to do so, arguing that it is not within the purview of the nuclear deal.
Tehran also insists that its complete economic benefits from JCPOA must be ensured once again before it returns to the limits of the deal.
Railroad Expansion
Noting that Iran is self-sufficient in the production of train wagons and rail, Minister of Roads and Urban Development Rostam Qasemi said presently there are 14,000 kilometers of railroads in Iran and an additional 4,000 kilometers are under construction.
“We need to expand our fleet of wagons and locomotives as well as rail more than ever,” he added.
According to Qasem Abdollahi, a member of Rail Transportation Association, about 150 locomotives owned by the government are currently grounded due to technical problems.
He noted that 50-60 new locomotives are needed in Iran every year.
Despite the benefits of rail freight transportation compared to other means, Iran has been suffering from a low share of railroad in cargo transportation.
The share of rail in freight transportation is less than 10%, according to Qasemi.
The low speed of cargo trains in Iran (currently at an average of 100 kilometers per hour), long distances between rail corridors and freight centers as well as the aging rail fleet of the country are the main reasons behind the lackluster performance of the rail sector, Mehr News Agency reported.
Rolling stock imports are banned and the market is entirely supplied by domestic producers, mainly Arak Province’s Wagon Pars Company, Isfahan’s Kowsar Wagon Company, Derakhshan Steel Company and MAPNA.
Iran unveiled its first domestically-manufactured locomotive in November 2020 after 10 years, called “Pars 33”, and with that Wagon Pars Company, which had ceased manufacturing locomotives around 10 years ago, officially resumed its activity in the field of locomotive production.
Wagon Pars, launched in 1974 in the city of Arak in Markazi Province, is a subsidiary of the Industrial Development and Renovation Organization of Iran and the largest manufacturer of freight, passenger and subway wagons in the Middle East. It also manufactures wagon brakes.
A total of 788 units of rolling stock, including passenger and cargo wagons, as well as locomotives, were manufactured in Iran in the fiscal 2020-21.
Record in Rail Transit, Exports
With 1.91 million tons of goods transited through the country, Iran registered a record in foreign cargo transportation in the last fiscal year, according to the IRIR chief.
“The figure saw a 2.5-fold increase compared to the year before,” Salehi said on the sidelines of the expo, adding that rail exports also reached a record high of 1.92 million tons last year.
Iran reportedly earns $50 for each ton of transit goods via rail.
A report, published by Research and Markets, an American-based specialist in business analysis, has singled out rail freight as a significant area of commercial growth in the years to come.
The report said the global rail freight transport market was valued at $247.39 billion in 2020 and anticipates a compound annual growth rate of around 2% over 2021-26. That makes rail freight a significant part of global economic recovery and has investors taking note.
“North America leads the global rail freight market,” says the company’s senior press manager, Laura Wood. “Asia-Pacific is expected to overtake North America during the forecast period. The rise in global trade and various trade agreements are boosting the global trade flows.”
While rail freight can play a role in globalization, the report notes that in many regions, rail freight is a factor in developing local economies.
“In some regions of Central Asia, Eastern Europe, South Asia, Southeast Asia and Sub-Saharan Africa, characterized by groupings of many small countries, rail freight can increase economic integration by providing access to international and regional markets and connecting landlocked countries,” she said.
