Tehran must lose its pariah status

11 January 2008
The latest efforts to boost private sector involvement in the Tehran Metro project display ingenuity, but also desperation at
the persistent failure to attract foreign capital to the project.

Even if the scheme to offer discounted land to local developers proves successful, it will only cover a fraction of the cost of construction.

Metro officials admit they are hoping for a thaw in Iran's relations with the West to persuade foreign contractors to invest in electrical work and rolling stock, which they have shunned because of political insecurity.

An end to the country's diplomatic isolation seems unlikely, however, in light of the recent challenge by Iranian speedboats to US warships in the Gulf.

While such incidents may play well with some sections of the Iranian public, the inconvenience of crowded journeys to work in Tehran can be assumed to have more direct resonance for the capital's commuters. The number of journeys taken on the capital's metro system in 2007 topped 350 million, compared with 3.5 million in 1999.

Tehran is now bankrolling most of the $18.5bn expansion plan itself, and overall is boosting government spending by 17 per cent this year, helped by oil revenues swelling the government's coffers.

Much of this money would be supplied by foreign firms were Iran not such an international pariah.

President Ahmadinejad and the nation's rulers must question how much longer opportunistic acts of brinkmanship can be allowed to outweigh the need for structural reform and investment at home.

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