Airport Projects Need $3b

Negotiations have been underway to attract investments worth $3 billion in major Iranian airports, for which firm contracts for about $649 million have been signed so far, a deputy minister of roads and urban development said.

“We are planning to promote investment in important and profitable airports,” Amir Amini was also quoted as saying by the ministry’s official news service.

The official noted that the ministry seeks to develop the airports of Mehrabad, Imam Khomeini, Tabriz, Mashhad, Isfahan, Kerman and Shiraz mainly through foreign investment.

“About $2.35 billion worth of memorandums of understanding have also been signed to develop the airports of Mehrabad, Mashhad, Tabriz and Isfahan. We need a further $200 million to build a terminal in Shiraz Airport,” he said, adding that talks are underway.

  Mashhad Airport Projects

French construction company Vinci SA recently signed a memorandum of understanding for the development of Mashhad International Airport, also known as Shahid Hashemi Nejad International Airport, on the sidelines of a business forum held in Tehran last week.

Vinci had previously signed a preliminary agreement with Iran for the development of the airport as well as that of Isfahan International Airport during President Hassan Rouhani’s visit to France in January last year.

Hossein Esfandiari, the deputy head of Iran Airports Company, earlier said the French Company’s representatives recently visited the airports of Mashhad and Isfahan, stressing that Iran is in “serious talks” regarding the projects in Mashhad.

According to Esfandiari, the French company will build a 43,000-square-meter international terminal and a 25,000-square-meter domestic terminal in Mashhad International Airport. 

The airport’s apron should also be expanded in line with the development of the terminals.

“The capacity of Mashhad International Airport is estimated to reach 5 million passengers per year after the two terminals become operational,” Iran Airports Company’s CEO Rahmatollah Mahabadi said.

  Mehrabad Airport Projects

As for Mehrabad, the airport signed an agreement with Italy’s SEA Group (Societa Esercizi Aeroportuali) for the construction of a new passenger terminal in Tehran’s Mehrabad International Airport earlier this year.

In the first phase, an 80,000-square-meter passenger terminal will be constructed and the agreement stipulates that it could be expanded to 120,000 square meters in the future as demand grows. 

Mehrabad’s current capacity is to handle 14 million passengers annually. The new terminal will add the same amount of passengers to the airport’s capacity. The plan, which is estimated to require an investment of €250 million, also includes landscaping and construction of parking space for 6,000 vehicles alongside the passenger terminal.

A €50 million investment agreement has also been signed with Vitali SPA—an Italian construction firm and general contractor—to develop Tabriz International Airport, in the provincial capital of northwestern East Azarbaijan Province.

The agreement concerns investment, design and construction of a new passenger terminal in Tabriz airport in two development phases. In the first phase, the terminal is estimated to be built on a 20,000-square-meter area to accommodate the landing of one wide-body and two average-body aircraft at the same time.

Revamping Iran’s airports is a top priority for the administration of President Hassan Rouhani, which engineered a deal with world powers to resolve a longstanding dispute over Tehran’s nuclear energy program and remove sanctions imposed for years on the country’s aviation industry.

  IKIA Airport City Project

Figures show the government has been able to increase the share of air travel in overall passenger transport. 

According to the Ministry of Roads and Urban Development, 18.9 million Iranian passengers travelled by air in the last Iranian year (March 2015-16), up 8% over the previous year. Air transport is predicted to grow 22% during this year.

This is while road passenger transport has seen an average annual decline of 5% in the past three years, which indicates a shift from road to air.

As part of Iran’s sixth five-year development plan (2017-22), the annual number of passengers transported via air is stipulated to reach 48 million.

The plan also envisages an increase of Iran’s share from international flights passing through the region. Officials are planning to turn the country into a hub of international flights by developing the area surrounding IKIA to create an airport city.

The state-owned IKIA Airport City Company was established in 2015 to manage the project’s execution and supervise investment activities.

During Rouhani’s visit to France a few days after the implementation of the nuclear deal, Iran reached agreements with Aeroports de Paris and Bouygues SA for cooperation in the construction of a new terminal at Imam Khomeini International Airport. The Ministry of Roads and Urban Development plans to increase IKIA’s annual capacity to 45 million passengers.

Companies from South Korea and the Netherlands have also been engaged in consulting on aspects of airport city development.

According to a master plan devised by Netherlands Airport Consultants, the airport’s passenger capacity is to increase to 30 million per year within the next five years from the current 7 million. 

The plan includes creating a 1,500-hectare free trade zone and a 2,500-hectare special economic zone in a 13,700-hectare area surrounding IKIA. 

The project also aims to establish 25 commercial facilities, encompassing a wide range of commercial activities, including manufacturing, telecommunications and logistics, hotels, retail outlets, entertainment complexes and exhibition centers, in a 400-hectare area in the vicinity of the airport.

Alongside the implementation of the IKIA airport city project, the completion of four development phases of IKIA is underway to increase annual passenger capacity to 90 million.

Amini said the government has signed firm contracts for the construction of terminals in IKIA and Kerman Airport, but did not elaborate on the signatory companies.