Government’s Track Record in Transportation Sector

Development of Iran’s transportation sector has topped the agenda of President Hassan Rouhani, amid years of underdevelopment exacerbated by sanctions imposed over Iran’s nuclear energy program and the slide in oil price oil only a year after the president took office. 

The lifting of sanctions in January 2016, as part of the historic deal between Tehran and world powers, paved the way for tens of billions worth of agreements with foreign companies to expand rail, road, marine and air transport infrastructures. 

Figures show that despite the severe shortage of cash, infrastructure development is continuing. 

The Persian-language Iran newspaper has reviewed the administration’s performance in the transport sector since the beginning of its term in August 2013. Excerpts follow:

 Railroad

The Rouhani administration has built 457 kilometers of railroads.  

A trilateral railroad constructed jointly with Kazakhstan and Turkmenistan was among the main projects. 

With 80 kilometers of the railroad running inside Iran, 700 kilometers in Turkmenistan and more than 120 kilometers in Kazakhstan, the 926-kilometer-long railroad was inaugurated in 2016.

It was aimed at facilitating cargo transit from the landlocked Central Asian states to Iran where the shipments can be transported via rail, road and sea to the Islamic Republic’s neighbors and destinations further afield.

Some 2.4 million tons of cargo were transported via rail from September 2013 to March 2016.

According to Chairman of the Islamic Republic of Iran Railways Saeed Mohammadzadeh, 12% of cargo transportation in Iran are carried out using rial. The share stood at 8.5% in 2013.

Abbas Nazari, director general of IRIR’s International Affairs Office, said the government has earmarked $10 billion worth of rail projects for foreign investment following the implementation of the nuclear deal. Iran has been in talks with Italy, Russia, China, India, France, Turkey and Germany to attract the needed foreign capital.

  Road 

As many as 10,642 kilometers of roads have been built under Rouhani, as 28.8 million tons of cargo were transported via roads during the period from September 2013 to March 2016.

“Between 800 and 1,000 kilometers of highways have been constructed across the country every year since 2013,” said Abdolhashem Hassan-Nia, deputy head of Road Maintenance and Transportation Organization, affiliated to the Ministry of Roads and Urban Development. 

The official noted that this year (ending March 20, 2017), the figure is expected to reach 1,200 kilometers. 

According to RMTO, currently 7,000 kilometers of highways are under construction across the country.

  Air

The Rouhani government has constructed and developed 54,000 square kilometers of airport terminals, as part of its plans to expand airport capacity in line with a rise in air traffic.

“Negotiations have been underway to attract $3 billion worth of investments in major Iranian airports, for which firm contracts for about $649 million have been signed so far,” said Amir Amini, deputy minister of roads and urban development.

The ministry seeks to develop the airports of Mehrabad, Imam Khomeini, Tabriz, Mashhad, Isfahan, Kerman and Shiraz mainly through foreign investment.

According to the official, about $2.35 billion worth of agreements have been signed to develop the airports of Mehrabad, Mashhad, Tabriz and Isfahan. The administration needs a further $200 million to build a terminal in Shiraz Airport.

In a historic development in the aviation sector, Iran signed deals with plane giants Airbus and Boeing to receive 200 planes potentially worth tens of billions of dollars, alongside a deal with Franco-Italian producer of short-haul planes ATR. 

State carrier Iran Air has recently received its first Airbus jet.

 Marine

Sixty-three development projects in Iran’s ports, with an approximate value of $126 million, have become operational since 2013. 

Iran has also signed 46 contracts worth $459 million with domestic and foreign investors to develop ports.

International companies have signed preliminary agreements with Iranian businesses to invest $3.2 billion in Chabahar, as part of development projects of Makran Coast in southeastern Iran. Seven major memorandums of understanding were signed with companies from India, Oman, China and South Korea in this regard.

A $2.1 billion agreement with Mohsin Haider Darwish LLC—an Omani holding active in a variety of fields, including engineering and construction—to build a 150-hectare logistics park in Chabahar, accounts for most of the investments.

Chabahar Free Zone Organization and South Korea’s POSCO signed another agreement to develop Chabahar’s infrastructures. 

Chinese companies have agreed to invest in the port’s infrastructure projects related to water, steel, oil and gas pipelines, seafood, shipping, construction and tourism.