Iran, Russia Sign Contract to Manufacture 500 Wagons

The Industrial Development and Renovation Organization of Iran has signed a joint venture contract with Russia’s CJSC Transmashholding to manufacture 500 wagons in Iran.

An IDRO press release published on Wednesday quoted the Iranian company’s deputy for expansion of industrial investment, Fardad Daliri, as saying that the contract stipulates “attracting investment and using up-to-date technology in the domestic manufacture of freight and passenger cars".

“In the first phase, only passenger cars will be produced,” Daliri added, without elaborating on the details of the contract, including its estimate value.

A conglomerate affiliated with the Ministry of Industries, Mining and Trade, IDRO is active in a variety of fields, notably auto production, oil and gas as well as wagon manufacturing.

CJSC Transmashholding is known as the largest manufacturer of locomotives and rail equipment in Russia. It is the biggest supplier of rolling stock to JSC Russian Railways. The enterprise was established in April 2002. Dutch firm Breakers Investments BV and Alstom Transport, French engineering group, are among the company’s stakeholders.

Transmashholding has major customers in Bulgaria, Belarus, Kazakhstan, Ukraine and Serbia. The company manufactures and sells subway cars, passenger diesel locomotives, diesel engines, freight cars, flat cars and diesel trains.

Held back by an underdeveloped wagon manufacturing industry, Iran is opting for joint venture deals with international companies to upgrade technology and boost capacity, while reducing reliance on imports.

Iranian Rail Industries Development Company and Chinese rolling stock manufacturer Nanjing Puzhen Co. LTD. signed an agreement in October to jointly manufacture 215 wagons for subways trains across Iran.

Based on the agreement, IRIDC will be in charge of manufacturing the wagons.

Germany’s Siemens also agreed in October to supply components for 50 diesel-electric locomotives to Iran’s MAPNA Group. Another agreement was also signed between the two companies to jointly manufacture 70 electric locomotives to be used in the 926-km Tehran-Mashhad railroads, which is being electrified.

In January, Islamic Republic of Iran Railways and German conglomerate Siemens transportation subsidiary, Siemens Mobility, signed several memoranda of understanding in Tehran to develop Iran’s railroads. The agreements concern electrification of Tehran-Mashhad railroad and Tehran-Isfahan high-speed train, supply of 500 wagons, development of Iran’s railroad infrastructure and provision of consultation and technology.

Between 2,000 and 2,500 wagons currently in use in Iran should double by 2025, as per the 20-Year Vision Plan.

The government of President Hassan Rouhani plans to reduce the country's high fleet age to 15 years to increase the efficiency of trains. There is also massive demand for new wagons as several railroads are being built across the country.

By 2025, existing lines should be electrified and double-tracked and about 12,000 km of new lines are planned to nearly double the network’s size.

Major rail projects are currently under construction, including the electrification of the Tehran-Mashhad line, a high-speed train connecting Tehran to Isfahan and connectivity projects with Azerbaijan and Afghanistan.

The government is keen to curb imports to help Iranian companies meet most of the wagon demand domestically. Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh has said his ministry is against importing wagons, as local companies are capable of meeting domestic demand.

Iran’s rail industry is in immediate need of some 1,500 wagons, experts believe, while merely a third of that figure has so far been produced domestically.