The contract between South Korea’s Hyundai Rotem and the Islamic Republic of Iran Railways for the production of suburban railbus wagons has not been terminated and is still in place.
"The Korean side is looking for a way to implement the contract in the face of banking obstacles reinforced by the reimposition of US economic sanctions against Iran," says Nourollah Beiranvand, IRIR’s deputy head for planning and investment, was quoted as saying by ILNA.
“Due to the new circumstances, it is natural that impediments occur in these kinds of contracts.”
The South Korean rolling stock manufacturer Hyundai Rotem signed a contract worth €720 million with the Islamic Republic of Iran Railways to produce 450 suburban railbus wagons in Iran last December.
As per the agreement, the Korean company was to form a consortium with Iranian Rail Industries Development Company, the Ministry of Roads and Urban Development's news portal reported.
The South Korean side also agreed to finance the project.
Former roads minister, Abbas Akhoundi, who was present at the signing ceremony, said the project will create jobs for 4,700 people in Iran and increase the capacity of Iran's suburban transportation to 70 million passengers per year.
“The project entails technology transfer to Iran and will generate 1,000 direct and 1,700 indirect jobs in the process and some 2,000 jobs after it comes on stream,” he added.
Saeed Mohammadzadeh, the chief executive of IRIR, said at the time that the first batch of the wagons will be delivered within the next one and a half years. He added that the Iranian government will be the owner of railbus wagons."
Hyundai Rotem Company manufactures and sells rail vehicles, defense systems, plants and machinery in South Korea. The company produces rail vehicles, such as electric multiple units, high-speed trains, light rail vehicles, magnetically levitated vehicles, trams, diesel multiple units, locomotives and passenger coaches.
The company was founded in 1999 as Korea Rolling Stock Corporation, the result of a merger between the three major rolling stock divisions of Hanjin Heavy Industries, Daewoo Heavy Industries and Hyundai Precision & Industries. Hyundai Rotem currently employs 3,800 and exports products to 29 countries.
The Iranian government has placed the expansion of Iran’s rail network on top of its agenda to facilitate transportation, conserve hydrocarbon fuel and reduce air pollution and road traffic.
Iran’s Sixth Five-Year Development Plan (2017-22) has tasked the government with increasing the share of rail in cargo and passenger transportation to a minimum of 30% and 20% respectively by the end of the plan.
