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TM Craving for Funds Insatiable

TM Craving for Funds Insatiable TM Craving for Funds Insatiable

The government paid $1.5 billion for development of urban train services in several cities in the country during the 17 years from 1997 to 2015, in excess of the required $1.4 billion.

“The government has paid more than its fair share to some cities including Qom, Kermanshah and Ahvaz as municipal revenues were in a deficit, with the aim of boosting their development and curbing the migration to Tehran and other metropolises,” Ali Nozarpour, deputy of municipal affairs at the Municipal and Rural Management Organization (MRMO), affiliated to the Interior Ministry, was quoted by the Persian language newspaper ‘Iran’ as saying.

“Ahvaz Municipality has contributed only 10% of the funding for the development of the urban train system, while the government has provided the remaining 90% ($129.3 million),” he pointed out.  

“Tehran is home to 15% of the country’s population; however, the Tehran Municipality (TM) has received 43% of total budget allocated for the country’s municipalities during the period.”

Up until last year (ended March 20, 2015), the TM had staked a claim of $810 million for development of the subway system, much higher than its budgetary approval. But the government has already paid its dues to all municipalities across the country, Nozarpour said.

However, Tehran Mayor Mohammad Baqer Qalibaf has repeatedly blamed the government for “unpaid dues” claiming that more than 93% of the funding for construction of the subway has been paid for by the Tehran Municipality. Further, he maintains that government contribution to the development of the metro in the sprawling capital was hardly 7%.

According to Nozarpour, so far successive governments have paid $405.4 million to the TM during the past 17 years. During the first nine months of the current fiscal year (ends March 20), $12.8 million was expended.

“The TM’s budgetary request is much higher than the annual budget allocated for development of the public transportation system. It is also over and above funds approved by the Majlis.”

He said the TM should not spend more than what is earmarked. Moreover, expecting the government “to cough up its dues” to the municipality is illogical, the newspaper quoted him as saying.

While deciding budget allocations the financial resources and economic status of municipalities are taken into consideration. “Municipalities with less income should receive more funding”.

The budget is much higher for larger cities like Tehran than for medium-sized or small cities and the TM benefits the most from revenue and tax collections, Nozarpour said.  Concentration of most facilities and services in Tehran has increased the number of rural people moving to the capital and led to unending social ills not to mention the battle for basic needs and utilities, namely affordable housing, electricity, schools, gas supply, public transport…

  Huge Revenue

Houshang Khandan-Del, deputy minister of interior for urban and rural affairs, had earlier said the TM earns huge revenues from issuing construction permits and other activities associated with the key real estate sector. Oneness, accountability and regular auditing of its books “is the only way by which the TM can gain the people’s trust,” he said.

Unfortunately, there is no clarity at present on the financial statements of the TM vis-a-vis its revenue and expenditure, and some annual inspections and audits in different fields show some financial operations of the TM are fraudulent and have not taken place under the supervision of the Tehran City Council, which as per law should oversee the activities of the municipality.

Earlier, the TCC at its 211th session had announced that the Tehran Urban and Suburban Railway Operation Company lacked sufficient audit and that the TCC auditors were unable to check the company’s financial record.

Financialtribune.com