Economy, Business And Markets

China to Finance 2 Subways

China to Finance 2 SubwaysChina to Finance 2 Subways

The governments of Iran and China have concluded a contract to finance the construction of new subway lines between Tehran and two nearby cities, lawmaker Gholamreza Kataeb told FNA on Monday.

“Tehran and Beijing have signed a contract to finance the construction of new subway lines to connect Tehran with the nearby cities of Varamin and Garmsar,” Kataeb noted. He went on to say that Iran has signed a contract in this regard with a consortium of Chinese companies, called HNCDI.  

The lawmaker added the new 108-kilometer extension is already under construction and with the help of Chinese finance the project will be completed within the specified time.

The Chinese companies will supply electrical and mechanical equipment as well as new wagons and locomotives and other railway-related equipment for the project.  

In November, Iran’s Deputy Minister of Roads and Urban Development, Ali Nourzad, said a contract had been signed between the ministry and another Chinese company to provide the required funding for the completion of a national railway project in western Iran.

Nourzad pointed out that Chinese finance will also be used to complete a 410-km railway that connects the capital Tehran with Hamedan and Sanandaj in the western part of the country.

In recent years, Iran and China have started several large-scale joint ventures mainly to develop infrastructure projects, including the Niayesh tunnel in northern Tehran. The tunnel was opened in February 2013 as the longest and most expensive tunnel construction project in the capital, with the aim of improving traffic flow in the northern part of the capital.

Other projects include the recently agreed Tehran-Caspian Sea highway, which uses Chinese finance and engineering services. The Caspian highway project is likely to be completed in the next few years.  

The surge in Chinese financing for Iran’s construction and industrial projects is part of an agreement to help China clear debts it owes to Iran for withheld oil delivery payments since US-led sanctions over Tehran’s nuclear energy program were intensified in 2012.

The Chairman of Iran-China Joint Chamber of Commerce, Asadollah Asgaroladi, said last week that Beijing has to fulfill its pledge of financing several Iranian projects to pay off its debts to Tehran.“We agreed to receive our money in the form of goods and finance,” the official explained as reported by Xinhua on Friday.

In November 2013, Iran announced that about $30 billion of its oil revenues had been blocked by Chinese banks due to the sanctions imposed on Tehran’s banking system.