State-owned National Iranian Steel Company (Nisco)is the client (MEED 24:1:03).

Under the Eur 142 million ($153 million) contract, the consortium will set up a 4 million-tonne-a-year pelletising plant using Lurgi technology. In addition to providing technology, the Lurgi-led European element will be in charge of basic engineering and parts of the detailed engineering. CIC will carry out the local detailed engineering portion, local procurement and construction. Completion is due in the first quarter of 2006.

The foreign consortium members will provide their own financing on an export credit agency (ECA) basis, while the project's 51 per cent local content is expected to be raised from domestic sources.

The consortium won the turnkey contract against competition from three other groups. Italy's Danieli & Company, with the local Industrial Development & Renovation Organisation (IDRO), was the low bidder, followed by Japan's Kobe Steel, with a local firm. However, none of the groups offered the client's preferred Lurgi technology.

It is understood that a fourth bidder, a consortium led by Austria's Voest Alpine Industrieanlagenbau (VAI), offered Lurgi technology but submitted a price about Eur 8 million ($9 million) above Lurgi's.

Six companies bid for the Sirjan scheme when it was first tendered in early 2001, with Kobe ranking first following the evaluation of both technical and financial bids. Nisco decided to retender the project in 2002 after Industries & Mines Minister Eshaq Jahangiri announced new guidelines for international tenders, calling for at least 51 per cent local content and assigning to local contractors the leading role in local/international partnerships.

Nisco subsidiary Gol-e Gohar Iron Ore Company, the operator of the country's biggest iron ore mine, will operate the plant.