Iranian Gov't Pushes Ahead With Road Fleet Renewal

The government is determined to replace Iran’s aging road fleet, as it recently implemented related plans.

Vice President for Executive Affairs Mohammad Shariatmadari said the administration has taken preliminary steps to use 140,000 new vehicles to expand the public transportation fleet.

“[The government] is prepared to replace 17,000 urban diesel buses,” he was quoted as saying by Mehr News Agency during a ceremony on Saturday for replacing 40,000 old taxis.

Shariatmadari said manufacturing companies have signed agreements with Tehran Municipality to renovate 1,600 buses, adding that plans are underway to replace 1,100 minibuses as well.

“A contract will be signed soon to manufacture BRT (Bus Rapid Transit) buses for Tehran,” he said, without mentioning the companies involved.

The move is aimed at reducing air pollution and fuel consumption in Tehran as well as other big cities across the country, which experts, people and officials have repeatedly blamed on inadequate, old and inefficient road vehicles.

Buses account for 23% of all transportation in Tehran. The city needs at least 10,000 buses for its daily commuting needs, while there are 7,000, a portion of which are "off duty" for repairs, according to the municipality.

Tehran aims to refurbish its entire fleet of public buses over the next few years by phasing out the older gas guzzlers.

Under a program, taxi owners can exchange their vehicles for a newer model with financial support from Iran Khodro, Iran's biggest carmaker based in Tehran. 

In cooperation with several banks, including Mellat, Parsian and Tejarat, taxi owners willing to change their vehicles are offered loans to the tune of 200 million rials ($5,500) at 23% interest, 7% of which will be covered by IKCO. 

So far, 9,400 taxis were delivered to owners in Tehran. Most applicants for the exchange deal were from Tehran, Tabriz, Mashhad, Karaj, Shahriar, and Qom.

According to IKCO's CEO Hashem Yekezare, the ultimate plan is to replace 90,000 taxis.

> Moving to Green Economy

During the ceremony, Massoumeh Ebtekar, the head of Department of Environment, said 915,000 old cars have been scrapped since President Hassan Rouhani took office in August 2013.

“We hope the move will include pickup trucks, minibuses and buses,” she said. “We do not have any other choice. This is a win-win move, which will help the environment and growth in green economy.”

The green economy is defined as an economy that aims to reduce environmental risks and ecological scarcities, while targeting sustainable development without degrading the environment. 

Replacement of 20,000 pickup trucks is also on the Iranian government's agenda, alongside plans to promote the manufacture of electric and hybrid cars and motorcycles.

“So far, 15,000 electric motorcycles have been locally produced,” Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh said in the ceremony.

He said his ministry has made local manufacturers replace the bikes' carburetors with fuel injection to help reduce pollutants.

Old transit trucks are also known as a major contributor to air pollution in Iran. The administration has launched a plan to replace them.

Based on a trilateral contract signed by the Roads Ministry-affiliate Road Maintenance and Transportation Organization, Iranian Fuel Conservation Company and Mammut Industrial Group last week, 5,000 aging trucks will be replaced with new ones.

The trucks will be financed via leasing, with 80% of the costs covered by government facilities.

The private Mammut Industrial Group was established in 1992. It is active in a variety of fields, including the manufacture of cargo and commercial vehicles, trailers and prefabricated buildings. Its subsidiary, Mammut Diesel, which produces both CBU and CKD trucks, is the official sales and services representative of SCANIA—the Swedish manufacturer of heavy trucks.

According to deputy minister of roads and urban development, Davoud Keshavarzian, 120,000-130,000 vehicles in Iran's cargo truck fleet have an average age of over 25 years.

As part of an agreement between the ministries of roads and oil, the government is planning to replace 65,000 dilapidated trucks within five years. 

Keshavarzian, who chairs RMTO, said this will cost the company roughly $2.7 billion—an average of $42,000 for each vehicle. 

However, based on the inter-ministerial plan, this sum will be covered through Oil Ministry’s savings generated by fuel conservation as a result of the replacements.

“This (the replacement of 65,000 old trucks) will reduce diesel consumption by 1 billion liters per year, generating an income of $1 billion annually,” Roads Minister Abbas Akhoundi said. 

“Based on the estimates, the plan to rejuvenate the road fleet will reduce pollutants by 194 million tons.”

According to a report by Roads Ministry, Iran needs 15,000 new trucks each year to renovate its aging fleet. 

More than 4,000 cargo transport companies are active across the country, carrying over 380 million tons of commodities nationwide every year. Some 860 companies transport over 4.6 million tons of freight from domestic ports to destinations in European, Central Asian and neighboring countries.