Major transport projects such as the expansion of the Tehran Metro are expected to go ahead in Iran once a nuclear deal is agreed with the P5+1 group of countries
Irans sprawling capital is preparing to expand its 152-kilometre-long network in order to keep pace with rising ridership levels and relieve the above-ground traffic gridlock that has left it with the unwanted reputation as one of the most polluted Middle Eastern metropolises.
Tehran Urban & Suburban Railway Company (TUSRC) is playing catch-up, having seen a shortage of funding hamper its efforts to have 200km of metro lines running by the end of 2015. The plan is to lift daily passenger capacity from 3 million to 8 million, in a bid to mitigate the strain that traffic has imposed on a city whose population has grown four-fold since 1960.
Achievement of sorts
With the completion of Line 3 this year, whose southern and middle sections were the only operational segments until now, Tehran has five fully functioning lines servicing its 87 stations (the others being lines 1, 2, 4 and 5). Given the metro only commenced operation in 2000, and the Islamic Republic has laboured under a restrictive international sanctions regime for most of the subsequent period, this is an achievement of sorts. It is also a reflection of the emphasis the long-serving mayor of Tehran, Mohammed Qalibaf, has placed on improving the citys creaking public infrastructure.
The plan for the Tehran Metro is to lift daily passenger capacity from 3 million to 8 million
TUSRC has nonetheless found it a struggle to get the necessary funding to complete its work. Back in 2011, the then head of Tehran Metro, Mohsen Hashemi, resigned in a power struggle with former president Mahmoud Ahmadinejad. This related to Ahmadinejads failure to release $1bn of parliamentary-approved cash to expand the metro network. The president was accused of wanting to have the Tehran Metro replete with lucrative construction contracts under his personal control.
That would have put the capital in line with other Iranian cities such as Esfahan, Mashad, and Shiraz, whose metro systems are all under government control, whereas Tehrans is overseen by the municipality. Hashemi had good reason for resisting Ahmadinejads embrace; the running of these cities metro schemes has come in for criticism. Hashemi said the metros expansion plans had been subject to delay in the procurement of equipment, stemming from the governments non-cooperation.
There is a political dimension to this. Hashemi is the son of Ali Hashemi Rafsanjani, a former president and noted Ahmadinejad opponent. He then came under strong pressure to exit from the Tehran Metro. The politicisation of an essential public infrastructure scheme only served to shackle its effectiveness. Pointedly, it has been suggested that it was Ahmadinejads ultimately unsuccessful attempt to gain political control of the Tehran Metro that delayed progress on the scheme, rather than Western sanctions.
Under the original expansion plans set out for the metro, it was to cover 430km of track, with 256 stations. However, these goals have had to be scaled back in light of the failure to secure funding, with the network covering 251km of track, with 175 stations.
Currently, the much-improved political atmosphere evident since the Obama administration in Washington opened talks with the Iranian regime two years ago, as it attempted to encourage Tehran to wind down its nuclear programme, has at least raised the prospect of the capital eventually going back to the original plan for 430km of track.
Speaking at a MEED rail conference in the UAE in October 2014, Mohammed Montazeri, deputy managing director of planning and logistics at TUSRC, said the Tehran long-term urban rail plan would comprise four express lines covering 179km and eight urban lines of 251km. The aim is to have five complementary tram lines across 60km, along with 13 main interchange stations, 54 transfer stations, 19 park-and-ride facilities and 10 public transport hubs to connect with other transport modes.
The number of metro stations would rise from the current 87 to 215. The four express lines would have 61 stations. Overall, that would mean having a massive 276 stations.
None of this will come cheap. According to Montazeris calculations, the four committed lines will cost $3.2bn, while the four planned new urban lines will cost $6.8bn. With the four express lines costing $8.5bn, that takes the total Tehran rail network cost to $18.5bn, without including the cost of the tram lines.
The Tehran Metro has managed to overcome some of the constraints imposed on it by the exclusion of Western technology partners and contractors. Up to 85 per cent of the equipment is produced locally and tendered to local firms. While these have done an impressive job in delivering five operational lines in the space of a decade and a half, the funding constraints have contributed to a series of missed targets.
Where banks were once responsible for half the funding of Tehran metro projects, by 2006 with the sanctions squeeze on the Ahmadinejad regime over Irans nuclear programme in full flow this had disappeared to nothing.
Major transport infrastructure projects are expected to move ahead if, as expected, the nuclear talks reach a successful conclusion this summer. As Esmaeil Ghahremani, business development manager at Frances Systra, told MEED earlier this year, Iran needs the negotiations to be successful in order for stalled rail and metro projects to continue.
According to Montazeri, the ambition is for the Tehran Metro to soon move to the $6bn second phase, which will involve building two new lines and extending another to reach Imam Khomeini International airport, adding some 110km of track. Even if foreign investment is not forthcoming, the needed funds would be made available over time by the Tehran Municipality and the government. Projects would not be halted, said Montazeri, but further delays would be inevitable.
The two new lines under construction 6 and 7 will cover 31km and 27km respectively, with 27 stations on line 6 and 25 on line 7. This will provide a total of 58km of line and 52 stations by a target deadline of 2016.
Line 7 of the Tehran metro will run from Velenjak to Afsareh. The main contractors for this work are Khatam al-Anbiya, the engineering arm of the Iranian Revolutionary Guards Corp, and Sepasad Engineering Company. Phase three work includes the construction of new track, new tunnels, stations, rolling stock and control systems. Line 6, meanwhile, runs from Sadeghi Square to Azadegan Highway, and will require 31km of new track, new tunnels, stations, rolling stock and control systems.
All this represents a sharp increase in expenditure in a short space of time, although TUSRC has in the past shown itself capable of working to a fast timetable. In 2005, with sanctions biting, Tehran had just 38 operational metro stations. By 2011, that had more than doubled to 84 stations.
TUSRC has had to think on its feet, lacking the substantial funding resources of some of its Middle Eastern neighbours. Like many Gulf metro projects, the Tehran Metro is looking to revenue generation through the development of property situated around the stations. According to Montazeri, Tehran boasts more than 35 station development projects with a total value of $2bn. He sees property development income related to the stations covering more than half of the metro construction costs, derived through retail and real estate opportunities.
With real estate values rising, station revenues are primed to play an important part in the future funding mix. This is doubly important given that Montazeri forecasts demand for 3,000 metro cars, almost four times the number of the existing stock of 868 cars.
With Mayor Qalibaf enjoying good relations with the government of President Hassan Rouhani, the political troubles that plagued the Tehran Metro may now be a thing of the past.
The possibility of commercial bank financing emerging after the final agreement with the P5+1 group of countries is signed this summer should resolve some of the funding constraints that have held the Tehran Metro back.
The metro has proved itself capable of thriving in difficult circumstances. It has managed to keep costs down and its claimed cost efficiency of $900 a kilometre per passenger capacity on Line 4 is bettered only by Singapores metro. But Iranian transport planners believe the countrys eventual reintegration into the international financial community will significantly enhance its chances of improving the quality of life in its polluted capital city.
Main contractors on Tehran metro
- Line 1: China International Trust Investment Corporation
- Line 3: Rail Transportation Industry Company
- Line 4: China North Industries Corporation
- Line 6: Ahab Construction Company
- Line 7: Sepasad Engineering Company
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.