Economy, Domestic Economy

Stronger Private Sector Role Crucial in Construction

Stronger Private Sector Role  Crucial in Construction
Stronger Private Sector Role  Crucial in Construction

The Rouhani administration aims to engage the private sector in completing semi-finished projects across the country, vice president for planning and strategic supervision said Tuesday.

The government has released more than 53% of the planned funding for capital asset acquisitions. “For provincial capital asset acquisitions, the government has so far allocated over 103% of the funding it had pledged, which shows a dramatic increase compared to last year’s figures,” Nobakht stated.

Meanwhile, the government spokesman invited all project developers and consultants to cooperate with the government in formulating the framework of the committees working on the implementation of the Sixth 5-Year Economic Development Plan. “The government is determined to provide optimum conditions for the participation of private companies in technical and construction projects,” Nobakht added.

Recently, many engineering consulting firms have complained about delays in extension of licenses for their contractors and consultants.

“The government plans to work more efficiently and thoughtfully on extending the eligibility period of the contracts, because we know the extent of financial and physical loss will be very high if the eligibility of contractors and consultants is not approved,” Nobakht asserted.

Nobakht’s deputy, Gholamreza Shafei also said that the contractor/consultant firms working in the construction sector have suffered big losses in the past few years due to low levels of economic activity. “So, we decided not to downgrade these firms until they swing back to profitability.”

The construction industry of Iran is divided into two main sections. The first is government infrastructure projects, including road and transportation projects. The second is the housing industry. Both parts are central to the cement industry. In recent years, the construction industry has been thriving due to an increase in national and international investment. Official reports say the industry is now the largest in the Middle East region. A 2013 report by the Central Bank of Iran indicated that huge amounts of idle money enter the housing market every year.

A report by the Australian Trade Commission put the annual turnover in Iran’s construction industry at $38.4 billion. The real estate sector contributed to 5% of GDP in 2008. Latest statistics have put the number of total Iranian households at over 20 million.

According to the ministry of roads and urban development, 2,000 new housing units are built in Iran every day. The ministry said that around $2 million is being spent every hour on roads and buildings across the country.