Iran has finalised a €2.2bn deal with China National Machinery Import and Export Corporation (CMC) to electrify a 926-km railway from Tehran to the northeastern city of Mashhad, a deputy minister of roads and urban development said.
Two-thirds of the contract are financed by the Chinese government with a very low interest rate, with the remaining third covered by Chinese insurer Sinosure, Asghar Fakhrieh-Kashan, who oversees Iranian firms’ talks with international businesses, told The Financial Tribune.
"Issues regarding the government guarantees were resolved during Minister of Economic Affairs and Finance Ali Tayyebnia’s recent visit to China," he added.
Tayyebnia attended the One Belt, One Road summit in Beijing earlier this month.
"Only drafting and other paperwork remains," Fakhrieh-Kashan said, announcing that CMC representatives will be in Iran in June to sign the contract.
"This is an important project that raises the operational speed of the line to 200 km/hour, meaning passengers can travel from Tehran to Mashhad in about four and a half hours."
In 2014, CMC constructed the Ankara-Istanbul high-speed railroad, together with China Railway Construction Corporation Limited and Turkish companies.
Iran’s MAPNA Group is "the main domestic subcontractor", Fakhrieh-Kashan said.
The Iranian holding signed a preliminary deal in October 2016 with Germany’s Siemens for the joint manufacture of 70 electric locomotives to be used in Tehran-Mashhad route.
Among other major railroad projects Iran is carrying out with the help of international companies, Fakhrieh-Kashan referred to a high-speed line from Tehran to Qom and Isfahan, for which Iran has already signed a contract with China Railway Group Limited known as CREC.
Image: Aerial view of Mashhad, Iran (Nima Najafzadeh/Creative Commons)