State-owned Ferrovie dello Stato Italiane (FS) is set to return to Iran as the transport ministers in both countries recently signed a memorandum of understanding (MoU) for undertaking joint projects in Iran’s rail sector.

Italian Transport and Infrastructure Minister Graziano Delrio and Iran’s Roads and Urban Development Minister Abbas Akhoundi signed the MoU in late January.

Italian media had reported the MoU could include contracts worth up to €5bn ($5.5bn).

FS’ engineering subsidiary Italferr is understood to have been selected for the proposed Tehran-Qom-Isfahan high-speed rail network, while another subsidiary, Italcertifier, will be working on the preliminary design of the test centre for the Islamic Republic of Iran Railways (RAI).

Akhoundi has earlier indicated Iran is trying to obtain the modern rail systems using a hire-purchase method, where the equipment is manufactured in the country.

The state has more than 10,000 kilometres of rail network, only 181km of which is electrified.

Iran has signed multiple MoUs with the Chinese and Russian governments as well as with Germany’s Siemens for the upgrade and refurbishment of its ageing rail infrastructure.