Big rail plans outlined

17 December 2004
Tehran plans to invest more than $16,000 million over the next 20 years to develop and expand its urban rail network. Speaking at MEED's Middle East Rail Projects conference in Dubai on 12 December, Mohsen Hashemi, chairman of the Iranian Union of Urban Rail Companies, outlined plans to build 750 kilometres of light rail, metro and suburban heavy rail routes by 2025. The programme will cover seven cities with populations of more than 1 million, including Tehran (see page 6).

With a rapidly rising population, the programme is designed to relieve congestion in the country's increasingly gridlocked cities and aid growth.On completion of the plan, it is hoped that about 50 per cent of all urban journeys will be taken on the proposed networks.

Tehran is looking to obtain 100 per cent financing for each project, similar to the funding solution for the capital's most recent metro expansion project, awarded to China North Industries Corporation (Norinco)in the summer. The eight-and-a-half-year financing for the $680 million contract is to be provided by the China Export-Import Bank. For the larger cities, the government and the relevant municipality will each repay 50 per cent of the loans, which will be guaranteed by the Economy & Finance Ministry and the government (MEED 11:6:04).

For smaller cities, Tehran will commit itself to 70 per cent of the repayments, with the municipality paying the remainder. For the majority of individual projects it is hoped that significant returns will be possible through land lease agreements with contractors for plots of land around stations on each route.

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