The Forum for Partners in Iran's Marketplace
 
 
 
 
 
 
 
 
 
 
 
     

May 2006, No. 40


Transport Industry

Iran is an important economic and trade partner for China and both governments of Iran and China attach high significance to expansion of bilateral economic and trade cooperation.

To renovate and develop rail transport fleet of Iran and to increase share of trains in domestic and foreign passenger transport, Raja Passenger Train Company, has signed a contract for purchasing 50 double-deck cars from China.

The double-deck cars can carry 110 passengers, are ventilated, are compatible with climatic conditions of Iran, and can travel at a maximum speed of about 160 km an hour.

The contract signing ceremony was attended by Deputy Minister of Road & Transportation and Managing Director of the Islamic Republic of Iran Railroads, Managing Director of Raja Passenger Train Company, Ambassador of People’s Republic of China, as well as Managers of CITIC, Chen Chuan Railway Vehicles (CRC) and Siemens companies.

Dr. M. Pour Seyed Aqaei, Managing Director of Raja Passenger Train Co.

At first, Dr. Mohsen Pour Seyed Aqaei, Managing Director of Raja Passenger Train Company, addressed the audience and noted that his company decided to purchase 50 double-deck cars through international tender bid to develop its fleet around big cities and use the cars for passenger transport to a distance of 500 km from big cities.

"Creditable companies from Italy, South Korea, and China took part in a tender bid, which was signed last September. After assessing proposals and prices quoted by participants in the tender bid, CITIC and CRC companies were chosen to produce the cars and they won the bid in cooperation with siemens Company. According to our studies, we are sure that the cars will be of the highest quality and we hope the contract will expand relations between the Islamic Republic of Iran and the People’s Republic of China.

We welcome cooperation with Chinese companies, especially since those companies are partners of West European companies and their products will be of the highest quality," he noted.

Xu Yudi, Managing Director of CITIC Co.

Afterwards, Xu Yudi, Managing Director of CITIC Company, said, "I think today will be a memorable day for all of us, because a number of powerful and influential companies will sign an important contract here and will start to cooperate in such a way that it would benefit all concerned companies."

"CITIC group is like a window to foreign markets. Total capital of the group amounted to 80 billion dollars by the end of 2004. We entered Iran’s markets since 10 years ago and built lines 1 and 2 of Tehran subway as the main contractor. At present, we are implementing a contract for developing the first line of Tehran subway as well as a coke and aluminum production plants. Total value of the contracts has been estimated at about 1.8 billion dollars.

CRC is the biggest and the most powerful manufacturer of passenger trains in China, which ranks the first in Chinese market. This company has established long-term cooperation with CITIC.

Last spring, our company started to cooperate with CRC and we signed a contract for supplying railroad cars with Saman Company. In that contract, Raja Passenger Train Company oversaw all technical points painstakingly and from that time, we have come to know Raja Company more closely. Raja Passenger Train Company enjoys good technical and managerial capabilities with regard to rail transportation.

China has progressed a lot with regard to manufacturing railroad cars after implementation of economic reforms and open-doors policies. We not only export cars out of China, but have also increased speed of our trains. At present, trains along 7,700 km of railroads in China at a speed of 160 km an hour. We are trying to increase speed of trains to more than 200 km/h in most major routes," he said.

Trade exchanged between the two countries reached 10 billion dollars last year, which was a historical record.

Liu Zhentang, Ambassador of the People’s Republic of China in Iran

Liu Zhentang, Ambassador of the People’s Republic of China in Iran, was the third speaker of the meeting who elaborated about expanding relations between Iran and China and said, "CITIC International Cooperation Company is a subsidiary of CITIC group, which has been active in the Iranian market for more than 10 years and has successfully implemented many big projects including Tehran subway. The company enjoys a lot of experience in terms of project location and finance. CRC is the biggest and the most powerful manufacturer of passenger trains in China.

I am sure that due to having good knowledge about the Iranian market, enough experience for implementing the project, as well as close cooperation, the two companies will be capable of manufacturing 50 double-deck cars as a big service for expanding rail transport industry in Iran.

Of course, Siemens Company is also involved in this project and I think that participation of Siemens will make the project a total success.

Iran is an important economic and trade partner for China and both governments of Iran and China attach high significance to expansion of bilateral economic and trade cooperation. Trade exchanged between the two countries reached 10 billion dollars last year, which was a historical record.

Crude oil is the main commodity that Iran exports to China and, in return, China sends mechanical and electrical equipment to Iran. Such supplementary cooperation will be reciprocally beneficial and bilateral trade will further grow during the current year. Signing this contract for manufacturing 50 double-deck rail cars is an example of mutual cooperation."

Mohammad Saeed-Nejad, Deputy Minister of Road and Transportation

In conclusion, Mohammad Saeed-Nejad, Deputy Minister of Road and Transportation and Managing Director of the Islamic Republic of Iran Railroads elaborated on the development of rail transport in Iran as well as growing cooperation between Iran and China.

He said, "During 23 years after victory of the Islamic Revolution; that is, up to 1380 (2001-20), we had only bought 50 passenger cars while that figure has been increased to about 365 railroad cars by now. Some 1,000 cars were delivered by the end of last year (that is early 2006) and 265 cars will join Iran’s rail fleet during the current year.

A good tiding for our people is that we are planning and have allocated credits for purchasing 750 passenger cars during the current year. Out of the said 750 cars, 50 cars are double-deck cars whose contract is being signed today and 700 cars will be manufactured by three big railroad car manufacturing companies.

We are also planning to manufacture and repair locomotives inside the country in cooperation with big foreign companies. We have signed a contract for manufacturing 200 locomotives and the contract is expected to be finalized before the end of the current year.

Fulfillment of the said contracts will enable our railroad fleet to handle 33.6 million passengers and about 50 million tons goods by the end of the Fourth Economic Development Plan.

With regard to overhauling our fleet, it should be noted that in line with a new policy stipulated by the Third Economic Development Plan as well as the Fourth Economic Development Plan and other domestic laws, the private sector will be encouraged to play a more active role in overhauling railroad fleet.

As we said before, a contract has been signed with the private sector for production of 66 railroad cars and a tender bid is being held for production of 108 cars, again by the private sector.

Private sector’s investment will be supported by the government through the banking system. During past Iranian year, 3,500 cargo cars were purchased by the private sector and most of those cars have already jointed our rail fleet and contracts for purchasing a similar number of cars are expected to be signed during the current year.

According to current policies, we will increase share of the private sector in passenger transport while ceding all cargo transport to private entities.

With regard to railroad network, based on current projections, major projects such as connecting cross-country railroad to such big cities as Shiraz, Zahedan, Rasht and Kermanshah will approach final stages and most of those projects will be made operational.

Also, 150 km of Bafq – Bandar Abbas railroad is double track and out of 670 km of projected railroad, contract for building 250 km has been signed and implementation of the project will start in the near future.

Another important plan for the current year is constructing double-track railroad from Ahvaz to Bandar Imam Port. Promotion of train signs and control systems across domestic railroad network is another important plan which is currently being considered. The goal is to increase capacity, safety, and speed of trains. Other plans include implementing ATC along Tehran – Mashhad route and CTC along Tehran –South and Tehran – Tabriz routes.

It is forecasted that we must rapidly move to remove bottlenecks at railroad stations through investments that have been considered thus far; so that, those problems will not trouble us in the future. Of special importance are important stations that we have in Tehran and Mashhad. The abovementioned measures aim at increasing share of railroad in total transportation system of the country. As said before, an important project is to build double-deck cars, which will be used across our railroad network when they will be built in the near future by CITIC. The project has been financed by Chinese companies and banks and this shows that there are good grounds for foreign banks and companies to get active in our country.

These are our plans for railroad system and I think that one of the best cooperation grounds with respect to investment and transport of industrial products is railroad.

We are conducting negotiations in this regard with other countries and the government has allotted hefty credits to this purpose, which amount to 8 billion dollar on the whole, including 500 million dollars for rail and air transport sectors and 4 billion dollars for urban transportation. Such big credits can establish good grounds for bilateral and international cooperation. I think nobody will be willing to lose this opportunity."

 

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