Germanys Siemens is expected to sign a contract with Irans Mapna Group for the manufacture of electric locomotives this week, according to a report by news agency Irna, citing Saeid Mohammadzadeh, managing director of Islamic Republic of Iran Railways (RAI).
Various sources have indicated that the agreement is for a total of 150 locomotives, the majority of which will be manufactured in Iran.
This follows the signining of a contract in October last year for Siemens to supply components for 50 diesel-electric locomotives that are destined for the railways agency.
The 50 locomotives are to be built in a factory owned by Mapna in Karaj, Irans fourth largest city, according to Siemens.
Apart from the locomotives, Siemens has signed an agreement for the redevelopment and electrification of the Tehran-Mashhad railroad.
It is understood that the $1.2bn financing being negotiated between Iran and Germanys government-owned development bank KfW Import-Export Bank (Ipex) will be utilised for the Tehran-Mashhad electrification project.
Iran and Germany also signed a cooperation agreement last week targeting rail, air and sea transport projects.
Based on the agreeement, a task force to develop mutual cooperation will be set up to focus on these areas.
Germanys Munich and Frankfurt airports are understood to be keen in playing a role in the development of Irans airports.