Economy, Domestic Economy

Private Investment Key to Preserving Historical Buildings

There are over one million historical buildings in Iran.
There are over one million historical buildings in Iran.

Iran has numerous historical monuments and buildings, the likes of which would be listed as architectural heritage in other countries.

Since the public budget is not sufficient to safeguard these monuments, governments around the world have lobbied for the participation of the private sector.

The most notable example of such a policy can be seen in Italy. Up to $400 million of Italian companies’ resources have been poured into cultural projects annually over the past decade. In return, these companies are entitled to different incentives and tax breaks.

Iranian officials also seem to have realized that the only way to preserve historical buildings is by encouraging the private sector to derive economic benefits from these buildings by retrofitting them.

To this end, the Revitalization and Utilization Fund for Historical Places was established within Iran’s Cultural Heritage, Handicrafts and Tourism Organization in 2005.

According to a report by Financial Tribune’s sister publication Tejarat-e Farda, the fund handed over only 10 historical buildings to the private sector between 2006 and 2013. Under the government of President Hassan Rouhani, about 80 historical monuments were added to the list and currently over 70% of 269 monuments listed by the fund have been transferred to the private sector and are undergoing restoration and repair.

The repurposing of historical buildings and monument for commercial use has its own critics who believe the protection and preservation of architectural heritage is among the responsibilities of the government and that the involvement of the private sector will inflict damage on historical monuments.

“A technical-commercial committee at ICHHTO evaluates the qualifications of those bidding to invest in historical monuments,” said the managing director of Revitalization and Utilization Fund for Historical Places, Mohammad Reza Pouyandeh.

“Initiatives on repurposing of historical buildings must be approved by this committee as well. The monument will be returned to public hands if the private investor applies any changes to the original project.”

Two other non-private bodies, namely the Ministry of Roads and Urban development and municipalities, oversee the restoration process of monuments along with the fund.

“New uses for historical buildings will be in line with their past status. In the meantime, their repurposing must prove to have economic benefits for the private sector to invest,” he added.

Pouyandeh noted that those who are opposed to the handover need to take into consideration the current condition of historical buildings.

“Most of them are crumbling or have turned into centers of social ills. The private sector’s investment and restoration of such buildings to gain benefits in return is much better than abandoning them to decay,” he said.

“On the other hand, the government has no money to spend on reinforcing these buildings. The entire oil revenues won’t be enough to repair all of Iran’s historical buildings that exceed one million. No country in the world can preserve its architectural heritage or upgrade and retrofit the buildings without the assistance of the private sector. Take the example of Spain and Paradores.”

Paradores is a chain of Spanish luxury hotels located in retrofitted castles, palaces, fortresses, convents, monasteries and other historical buildings. They add to the attractions of heritage tourism and help preserve historical buildings.

Asked about the economic feasibility of handovers for investors, the official said all the buildings that have been sold have proved to be financially viable.  “Domestic and foreign tourists are eager to stay in Iranian traditional hotels and restaurants like caravanserais (roadside inns where travelers could rest and recover from the day’s journey). Investors also make a stronger pitch for historical buildings located in cities popular with tourists as well as caravanserais along the Silk Road,” he said.

In addition to local investors, companies from Italy, China, Japan, Turkey and South Korea have signaled their readiness to invest in preserving Iran’s architectural heritage, but these projects have not yet gained steam.

Noting that the fund will provide 50% of the capital needed to repair historical monuments for investors, Pouyandeh said ICHHTO has invited top executives of Paradores to visit Iran in the next couple of months and will hopefully reach a cooperation agreement.

“The most successful projects of the fund include Caravanserai of Sa’d al-Saltaneh in Qazvin, Apadana Hotel in Shiraz, Ameri Hotel in Kashan and Laleh Hotel in Yazd,” the official concluded. 

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