IDROand General Mechanic, both local, and a South Korean consortium led by Daelim Engineers & Constructorsand including LG Engineering & Construction, Hyundai Engineering & Construction Companyand Daewoo Corporationsubmitted bids for both lines. China’s CTICbid only for line 3 and a team of Germany’s Siemenswith China North Industries Corporation (Norinco) bid only for line 4. The foreign bidders are likely to subcontract the civil construction and some electrical and mechanical works to local companies to comply with Iran’s regulations governing local content.

Line 4, worth approximately $1,500 million, is the only one for which a budget has been earmarked this year. It will stretch from Kazem Abad in northeast Tehran to Eslam Shahr in the far southwest. Line 3, worth around $3,000 million, is likely to be awarded in 2004. This will run along the city’s east-west axis, from Shahrak-e Ekteban near the airport to Dowshan Tappeh in the east.

In addition to carrying out the engineering, procurement and construction (EPC) of the line, contractors have also been asked to provide financing for the supply portion of the contract. The Chinese companies are expected to receive financial backing from their government, while the Koreans and Germans will look to private financing and export credit agencies.

Project sources have expressed some surprise at the participation of IDRO, a state company, and General Mechanic, a government-owned bunyad or religious foundation. They say the challenging scope of works and financing will prove especially onerous for companies with no proven experience of metro construction.

Siemens and CTIC were already in detailed negotiations with the client, Tehran Urban & Suburban Railways Company, on the contracts before they were retendered last year. As a result, the two companies are well positioned to take advantage of their strong experience on the projects.