Officials admit the proposed high-speed links between Tehran and Esfahan via Qom, and between the capital and Mashhad in the east, will have to be modified.

Foreign investors have been unwilling to bankroll such large projects at a time of political uncertainty, and the government has been forced to fund the two rail links itself.

“One kilometre of high-speed track costs e3-4m ($4.5-6m),” says an official working on both projects. “It is very difficult to get finance, especially with the political conditions.

“This is why the government is looking at transport as a complete engineering, procurement, and construction project, and is building a total transport solution for the country. We cannot find foreign investment so the government is funding projects where it can.”

The financial constraints mean that rather than building high-speed lines, Tehran will instead modify the existing track on the two lines. This will allow for a faster service, with a view to upgrading to a fully high-speed service in the future. Both projects are also likely to be delayed.

“Optimistically, the line between Tehran and Esfahan is due to be completed within five years, but realistically I think it will take at least 10,” says the transport official.

The cost of renovating the 150-kilometre stretch of track between Tehran and Qom alone is expected to run to e1bn. The work has run into difficulties because parts of the line are unsuitable for refurbishment. A 20-kilometre stretch of line needs to be torn up and completely relaid along a different route because a series of bends are too tight for a faster rail service. The local Metra Consulting Engineers and French rail group Systra are working on tests for earthworks to carry the new rails.

On the line between Tehran and the eastern city of Mashhad, the Iranian rail regulator has issued a tender to electrify the 1,000 kilometres of double-line track. Islamic Republic of Iran Railways is seeking a contractor to provide overhead electrical cables, substations, and 70 electric locomotives for the railway. The closing date for bids is 19 February. Once a contract is awarded, the anticipated construction time will be 30 months.

The Italian group Italferr is consulting on the work, alongside Metra. The project is also a modification of the current track. A high-speed link between the two cities is still planned, but will require completely new earthworks, which are unaffordable at present.

“The results from the preliminary study show that the new passenger line [between Tehran and Mashhad] will need a completely different corridor,” says the transport official.

Major transport projects in Iran are beset with financing difficulties as a result of the delicate geopolitical situation.

In November 2007, senior officials on the Tehran Metro admitted that the $18.5bn project would have to be state funded because of the refusal of private investors to back the scheme in the current climate (MEED 2:11:07).

Despite the difficulties, Raja Passenger Train Company, which is affiliated to the state-owned Iran Railways, recently unveiled plans to buy 30 trains from South Korea. The first six of these will be delivered to the company in February, with the rest to be sent in parts to be assembled in Iran.

Raja's managing director, Yousef Hojjat, says the company is also close to agreeing a deal to purchase 220 wagons from Italy.

Metra and France's Egis Rail are still at work on the Transport Ministry's masterplan for Iran. Already three years in the making, transport officials estimate the plan, which will encompass improvements to Iran's rail, road, and aviation networks, will be complete by 2010 or 2011.