The Ministry of Roads and Urban Development on Saturday opened a major conference to showcase investment opportunities worth €25 billion ($28 billion) in Iran. Key investment areas include transportation, housing and urban development.
The two-day event seeks to promote private-sector partnership --which saw a significant decline during the controversial tenure of former president Mahmoud Ahmadinejad (2005-13). Latest official data suggests a 30% private sector participation in transport projects, down from 70% during the presidency of the reformist Mohammad Khatami (1997-2005).
Hassan Ahmadi Noori, an official at the Construction and Development of Transportation Infrastructure Company, affiliated to the Ministry of Roads, announced ahead of the meeting that road investment projects worth €2.5 billion ($2.8 billion) will be introduced to potential investors during the high-profile gathering.
Addressing the meeting attended by 150 foreign participants on Saturday, First Vice-President Eshaq Jahangiri vowed to “cut off” the hands of middlemen from the economy whom he considered a major hindrance to growth and sustainable development.
“To attract foreign investors, we will eliminate middlemen and blacklist foreign companies that use unconventional methods for investing in Iran,” Jahangiri emphasized.
Jahangiri has been assigned by President Hassan Rouhani to navigate the economy out of recession, mainly through reforms and with the help of foreign investment.
Upsides of Doing Business
“Iran’s primary economic mission for the next 10 years,” Jahangiri proclaimed, “is to develop a sustainable job market, promote social justice, and expedite economic growth as a way to augment national security.”
He highlighted the upsides of doing business in and with Iran, namely “political stability despite ethnic diversity, immune to the turmoil and chaos that has gripped the region, abundant energy resources, geopolitical proximity and a large and educated young population.”
The government has yet to unveil oil, gas and petrochemical projects worth tens of billions of dollars after the new oil contracts were approved by the Cabinet, he told the conferees.
Last week the Cabinet approved the outlines of the new petroleum contracts, known as Iran Petroleum Contract, due to be unveiled early next year. The IPC is aimed at accelerating the development of oil and gas fields, making up for underdevelopment in joint fields over the past few years and employing advanced technology to boost production and productivity in the key energy sector.
Abbas Akhoundi, minister of housing and urban development whose ministry has organized the rare event accentuated the importance of foreign direct investment in the country.
Improving Air Travel
He noted that “92% of transportation in Iran by roadways and this figure should be reduced to 78% as we aim to increase air travel tenfold.” He added that the country is planning to build seven new international airports and buy 500 over the next decade.
“While six million passengers use the Imam Khomeini International Airport every year, that number should increase to 50 million.”
The minister told a newspaper ahead of the conference that the transportation sector in Iran needs a “paradigm shift.”
Tehran is indeed “taking a new approach in the area of housing and urban development by developing self-sufficient, sustainable cities,” Akhundi said.
He considers his signature achievement to be the promotion of non-interventionist policies in the market and putting an end to price regulations that have harmed private enterprise at the cost of social credibility for the government.
“Apart from political risks that depend on government actions, Iran has very good foreign investment laws which should be appealing to foreign investors,” he said.
Economy Minister Ali Tayyebnia addressed the seminar, hailing the country as a new “top-investment destination” which enjoys maximum safety.
Conduit for Global Trade
“Iran is at the crossroads of nations and this unique advantage should enable us to expand our railroads and improve our airspace and roads a conduit for global trade,” he said.
Central Bank Governor Valiollah Seif also considered the easing of sanctions as a gateway for enhanced investment in transportation, housing and urban development.
He saw stability in the foreign exchange market, enhanced participation of banks in the economy and directing lenders’ resources toward stimulating domestic manufacturing as a prerequisite for an investment-friendly climate.
According to the senior banker, the share of transportation in the economy had surged 6.9% during 2013-2014 at an annualized rate. “Considering the fall in the international price of oil, promoting the role of the private sector is inevitable.”
The two-day event is underway at IRIB Int’l Conference Center in Tehran. A website has been launched for the meeting in Farsi and English with added features to assist those interested in the Iranian market at http://investment.mrud.ir
