France-based construction and development firm Vinci is understood to have finalised a deal with local engineering and construction company Kayson Incorporated to invest an estimated $400m for the expansion and operation of two major airports in Iran.

The first airport is Shahid Hashemi Nejad International, located in Iran’s second most populous city of Mashhad, and the other airport is located in Isfahan.

The deal for Mashhad airport, the country’s second busiest airport next to Tehran’s Mehrabad International, involves the construction of a 43,000 square-metre international passenger terminal and a 25,000 square-metre domestic terminal.

Vinci signed a memorandum of understanding (MoU) with the Iranian government for the development of the Mashhad airport earlier this year, a year after a preliminary agreement was signed.

Development work for both airports wil be undertaken on a build-operate-transfer (BOT) basis.

In contrast, the preliminary contract for the expansion of Imam Khomeini International airport (IKIA), signed with another France-based firm Bouygues, has stalled.

A local media report indicated that the IKIA Airport City Company has cancelled the deal with Bouygues due to the French contractor’s failure “to fulfill its commitments under the agreement.”

A Bouygues spokesperson has acknowledged that the memorandum of understanding (MoU) signed in early 2016 is already void although discussions with Iranian authorities are still ongoing.

It is understood that the project faced difficulty in raising the required financing from international banks.