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Iran, Italy ink 1.2b euro deal on railway

Iran, Italy ink 1.2b euro deal on railway

TEHRAN: Iran, following the removal or relaxation of a range of international sanctions, seeks to develop its national railway industry by attracting huge investments from major international players. Iranian and Italian state-run railway companies have signed memorandums of understanding for mutual cooperation on July 11, the Iranian railway company said. A deal worth 1.2 billion euros for building a 135-kilometer high-speed railway between Iran’s central cities of Arak and Qom is among the MoUs which were signed by Renato Mazzoncini, CEO of Italy’s state railway company and his Iranian counterpart Saeed Mohammadzadeh in Tehran. The railway is the first stretch of a high-speed rail line which the Italian side plans to build in Iran, with the other being a 320-km planned link between Tehran and Hamadan. The deal follows an earlier reached agreement that saw Italy promise Iran $5.6 billion in export credits in return for contracts to build the Qom-Arak and Tehran-Hamedan railways.

Italy will also provide rolling stock for high-speed and conventional lines, training for Iranian railway managers and a research centre to develop railway technology. The two sides also signed a MoU with Iran’s University of Science and Technology for training and transfer of technology, according to the report. The improvement of railway services is one of the top priorities of Iran defined in the Sixth Five-Year National Development Plan 2016-2021. Iran plans to invest $25 billion over the next 10 years in the modernization and expansion of its railway network, stretching out its railroad line to 25,000 kilometers by 2025 from under 15,000 kilometers now. During the past four years, $1 to $1.5 billion of direct investments have been attracted by the railway sector per year and $7.5 billion have been allocated by the government to guarantee investments in this sector.

Italy was the first trade partner of Iran among the European Union member states, during the first three months of 2017, according to European Union’s statistics agency, Eurostat. The volume of trade between Iran and Italy in the same period hit 1.2 billion euro, with 800 million euro pertaining to Iran’s exports to Italy and €400 million to its imports from the country.