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Dispute Over Iran Airports Company’s Revenues

Iran Airports Company’s annual budget stands at 13 trillion rials ($325 million).Iran Airports Company’s annual budget stands at 13 trillion rials ($325 million).

The Ministry of Roads and Urban Development has asked the government and parliament to deny the Islamic Republic of Iran Air Defense Force a share of Iran Airports Company’s revenues.

This followed the Air Defense Force’s attempt to get a share from Iran Airports Company’s revenues by saying, “Financial resources are needed to spend on radars for providing flights security”, according to a report by the Persian daily Shargh.

The following is taken from the report, which is only focused on the arguments of the ministry and the company, without including the stance of Air Defense Force.

The report does not necessarily reflect the Financial Tribune’s viewpoint.

 Lacking Development Budget

Splitting the Iran Airports Company’s income would make it impossible to continue the operations of airports, says director general of Mehrabad International Airport, Ali Rostami.

“Problems associated with the funding of some organizations should be resolved without hurting other departments. The government needs to provide financial resources for the likes of IRIADF through other industries,” he added.  

Iran Airports Company should secure 170 trillion rials ($4.25 billion at market exchange rate) in the next five years to expand and renovate airports’ infrastructures and equipment, according to a report by the Transportation Industry monthly. This comes in addition to the 60 trillion rials ($1.5 billion) the company needs for its current costs, the report added.

With the only profit-making Iranian airport, Tehran Imam Khomeini International Airport, spun off from the Iran Airports Company last year, the latter’s revenues reduced by nearly 4 trillion rials ($100 million) in the current Iranian year (March 2016-17).

The company’s annual budget stands at 13 trillion rials ($325 million). Neither does the company have a fraction of public budget, nor does it enjoy any free services from state-run institutions. It is not entitled to any kind of tax exemption.

 Free Services Galore

By law, Iran Airports Company is obliged to spend millions of dollars on giving free services to the police and military forces as well as the Civil Aviation Technology College, according to the report.   

The Islamic Republic of Iran Air Defense Force does not provide any services whatsoever to the Iran Airports Company, the report noted, adding that on the contrary, the company has been the sole “free of charge” service provider for IRIADF and all branches of military during the past years, which are estimated to reach about 1 trillion rials ($25 million). Military and government personnel flights constitute 30% of all the flights operated by Iranian airports.

“One of the main reasons behind the diminished economic vitality of Iran Airports Company is the imposed costs of delivering free services to state organizations, such as the Islamic Republic of Iran Customs Administration, the Immigration and Passport Police Office, Iran Veterinary Organization Quarantine and Biosecurity and Bank Melli Iran as well as protocol procedures of government officials, the Islamic Republic of Iran Army, the Islamic Revolutionary Guard Corps, Islamic Republic of Iran Navy and Law Enforcement Force of Islamic Republic of Iran,” the report said.

Iran Airports Company has constructed 53,000 and 45,000 square meters of office space for IRGC and NAJA respectively. It has also dedicated large areas in terminals and office buildings to these two institutions and other organizations, including the Ministry of Intelligence, Islamic Republic of Iran Air Force and the Islamic Republic of Iran Air Defense Force.

Over 2 trillion rials ($50 million) of the company’s financial resources are spent on infrastructure and procurement of equipment needed by security and defense forces.

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