Economy, Domestic Economy

Construction Spending Rises 223%

Construction Spending Rises 223%
Construction Spending Rises 223%

The Rouhani administration has allocated 110 trillion rials (more than $4 billion) to civil construction projects in the first six months of the current Iranian year (March 21-September 22), indicating 223 percent growth as compared to the same period last year, FNA reported on Tuesday.

The report added that the total amount of state funding for the construction projects reached 34 trillion rials (more than one billion dollars) during the same period last year.

In rural areas, the total budget allocated to civil construction projects has reached 30 trillion rials (more than one billion dollars) in the first half of the year. The number shows a 10-fold increase compared to 3 trillion rials (about $112 million) spent on rural construction in the same period last year.

Earlier this year, Mohammad Bagher Nobakht, president’s adviser for supervision and strategic affairs, announced that the administration will allocate all the required finances for those civil construction projects with more than 70 percent of progress.

Part of the government’s plan of action to exit recession, published in June 2014 by the Rouhani administration’s economic team, explains a process through which the government aims to pay off its debt to the contractors as well as to the banking system. The government plans to amend the current budgeting process and instead, provide a detailed projection of all estimated income and expenses based on forecasted sales revenue for each fiscal year.

Officials say the government aims to assign semi-finished projects to the private sector because the civil construction budget alone cannot meet the current needs of construction sector.