Economy, Business And Markets

Siemens Rail Deal With Iran Worth €1.5-2b

Siemens Rail Deal With Iran Worth €1.5-2bSiemens Rail Deal With Iran Worth €1.5-2b

Siemens AG’s contract to build rail coaches and upgrade train lines in Iran is valued at between €1.5 billion ($1.6 billion) and €2 billion, making Europe’s largest engineering company one of the earliest beneficiaries of the decision to lift trade sanctions on the country.

“There is a lot of opportunity building up infrastructure,” Chief Executive Officer Joe Kaeser said on Wednesday in an interview with Bloomberg TV in Davos, Switzerland.

Kaeser did not specify the timeframe of the contract.

“If you look at what Iran needs to rebuild its country, it almost looks like a description of business for Siemens,” he said.

Siemens positioned itself early to capitalize on trade with Iran, signing a memorandum of understanding with the country’s authorities earlier this month.

Final details would be worked out once restrictions were lifted, which happened over the weekend after the International Atomic Energy Agency, the United Nations’ nuclear body, concluded that Iran complied with an agreement to curb its nuclear development program.

The deal with Iran calls for Siemens to build 500 train carriages and improve electrification on two lines serving the capital city of Tehran, according to a person familiar with the arrangement. It also includes service and maintenance contracts.

Chief Technology Officer Siegfried Russwurm was part of a German delegation that visited Iran in November.

Kaeser suggested that the rail contract may lead to more Iranian deals for the Munich-based company.

“I was leading the discussion with two Iranian ministers who happened to see us today and were explaining what the country needs and what we can contribute,” he said.

Kaeser has been seeking to add contracts and jobs in the Middle East to offset slowing orders in Europe and last year sealed a $9 billion order for energy generation equipment from Egypt.