Domestic Economy

Rail Fare Rise Put on Hold

Rail Fare Rise Put on HoldRail Fare Rise Put on Hold

Although raising rail fares is legal, the tickets will be sold at the same prices until further notice, announced Chairman of the Islamic Republic of Iran Railways Guild Association’s Board of Directors Seyyed Hassan Mousavinejad.

His statement was in response to Vahid Manaei, an official with the Consumers and Producers Rights Protection Organization, last week who announced as “illegal” any potential rise in rail fares and said the move has not passed through the procedure prescribed by the organization and Market Adjustment Working Group.

The organization, affiliated to the Ministry of Industries, Mining and Trade, is tasked with protecting consumers against unusual price fluctuations and monitoring and adjusting the price of products and services, IRNA reported.

“According to the law, rail transportation services are subject to pricing and any price hike without the approval of the Consumers and Producers Rights Protection Organization would be illegal, and should the IRIR proposal be approved, prices can only be increased by a maximum of 6%,” Manaei said.

He added that railroad companies’ failure to comply with regulations could lead to prosecution.

Mousavinejad invoked Clause 9 of the “Free Access to Rail Transportation Network Law” ratified by Majlis in 2005 and said prices of train tickets should be set by the companies of the private sector and will be implemented after securing the go-ahead from IRIR.

“Therefore, new ticket prices introduced on December 5 is legal and in accordance with the law,” he said.

“IRIR’s approval came after 15 months of negotiations between private sector companies and the government, as well as a comprehensive evaluation of all aspects. The measure was taken with regard to the country’s yearly inflation.”

Mousavinejad stressed that with no new investment in the country’s rail system and high maintenance costs of passenger trains, the final solution to prevent loss-making is to delegate pricing to the market.

The IRIR chairman noted that renovating the rail network, giving a boost to rail fleet performance and avoiding private sector investment and capital flight are other reasons behind the nod to 8% price rise.

Mousavinejad further said, “As we speak, the tickets are sold at discounted prices until the problems are resolved through negotiations with the Consumers and Producers Rights Protection Organization.”

Earlier, Mohammad Rashedi, the deputy head of Islamic Republic of Iran Railways, had announced that rail fares were to increase by 8% on average as of December 16.

“Ninety-one trains out of the total 137 trains will see a 10% rise in ticket prices and the rates for the remaining 46 will increase by 15%,” he said.

Rashedi added that only companies that consider discounts on off-peak days are allowed to raise their fares by 20%, Mehr News Agency reported.