Economy, Domestic Economy

Plane Deal With Japan to Be in BOT Framework

Plane Deal With Japan to Be in BOT FrameworkPlane Deal With Japan to Be in BOT Framework

Deputy Roads and Urban Development Minister Asghar Fakhrieh-Kashan said any agreement with Japanese planemaker Mitsubishi Aircraft Corporation for the purchase of short-haul planes will be in the framework of a BOT (build–operate–transfer) contract.

BOT is a form of project financing, wherein an investor agrees to build, finance the construction of, and operate and maintain a particular infrastructure asset (e.g. an airport, port, power plant, water supply system, etc.) for a certain period of time before transferring the infrastructure asset to the other party.

Iran has said it is willing to buy 25 Mitsubishi Regional Jet aircraft worth up to $500 million. The majority of the prospective planes will be supplied by Japan to Iran Aseman Airlines. The Japanese company, which is a unit of Mitsubishi Heavy Industries, began market surveys in Iran last September, four months before the lifting of western sanctions against Iran over its nuclear program.

The Mitsubishi Regional Jet, or MRJ for short, is a twin-engine regional aircraft that is still under development. It is being manufactured in a partnership between majority owner Mitsubishi Heavy Industries and Toyota Motor Corporation with design assistance from Toyota-affiliate Fuji Heavy Industries. It will be the first airliner designed and produced in Japan since the NAMC YS-11 of the 1960s, which was produced at a loss. Its first flight was in November 2015, with deliveries scheduled for 2018 for the 90-seat model.

Since it is developing the 90-seater first, the company plans to deliver its other MRJ version with 70 seats in 2019 at the earliest.