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Investment

Introduction

The Islamic Republic of Iran, covering an area of over 1,648,000 km², borders Turkmenistan, Azerbaijan, and Armenia from the north, Turkey and Iraq from the west, and Afghanistan and Pakistan from the east. Iran's access to the Caspian Sea in the north and the Persian Gulf and Oman Sea in the south, and hence, its access to the Indian Ocean has turned this country into a communication bridge between Eastern and Western Asia, and also a passage between the two continents of Europe and Asia in the international transportation field. The existence of communicational routes such as the Silk Road, the Pearl Road, and the India-Indus Roads, which passed through Iran in the past, proves this claim. On the other hand, considering the vast area of the Islamic Republic of Iran, the existence of major ports, mines, and industries in this country and daily transit of large volumes of goods and passengers both locally and internationally, investment in development and completion of transportation network in Iran can be an appropriate field of investment in this country.

According to the estimates, in order to materialize the goals of the comprehensive transportation plan till 2025, five thousand billion Toman investment is needed which shows the high capacity of capital attraction in this sector. It is noteworthy that the transportation network of the Islamic Republic of Iran, till the end of the year 1398 (late March 2019), has included 14,779 kilometers of railroads, 2,503 kilometers of freeway, 18,122 kilometers of highways, 25,814 kilometers of main roads, and 37,601 kilometers of auxiliary roads.
The road transit included 467 million tons of goods and 144 million passengers by public transportation vehicles; while the railway transit in the one year (1398) was nearly 47 million tons of goods and 29 million passengers.

Introduction

Introduction

The Islamic Republic of Iran, covering an area of over 1,648,000 km², borders Turkmenistan, Azerbaijan, and Armenia from the north, Turkey and Iraq from the west, and Afghanistan and Pakistan from the east. Iran's access to the Caspian Sea in the north and the Persian Gulf and Oman Sea in the south, and hence, its access to the Indian Ocean has turned this country into a communication bridge between Eastern and Western Asia, and also a passage between the two continents of Europe and Asia in the international transportation field. The existence of communicational routes such as the Silk Road, the Pearl Road, and the India-Indus Roads, which passed through Iran in the past, proves this claim. On the other hand, considering the vast area of the Islamic Republic of Iran, the existence of major ports, mines, and industries in this country and daily transit of large volumes of goods and passengers both locally and internationally, investment in development and completion of transportation network in Iran can be an appropriate field of investment in this country.

It is worthy of note that the Company of Construction and Development of Transportation Infrastructures, since its foundation till the end of 1397 (late March 2018) has undertaken the construction and exploitation of 2,785 kilometers of railroads, 13,870 kilometers of roads and highways and 1,234 kilometers of freeways.

History of Investment

  • Participation of the private sector and banks in construction of all the freeways under operation in the country as well as the freeways under construction
  • Financing the procurement of rails in in various projects
  • Issuance of corporate bonds since 2001 in the field of transportation infrastructures
  • Utilization of the facilities received from the Islamic Development Bank (IDB) early in a decade following 2000 in the railway system
  • Financial Provision of the Tehran-Qom-Isfahan express railway project through finance of China
  • Exchange of letter of understanding on construction of railway network with South Korea, China, Russia, Ukraine, India, Azerbaijan Republic, Iraq and Armenia
  • Exchange of 4 trade agreements with 4 great and valid Chinese companies with an approximate value of €4.9 billion
Goals of Road and Freeway Construction

Goals of Participation

  • Acceleration in removal of infrastructural problems of development of transportation network of the country and the region
  • Increase of productivity in urban and service activities of transportation sector
  • Increase of effectiveness and optimal allocation of financial resources and budget credits of government via the capacity of financial tools
  • Attraction of non-governmental sector’s liquidity and usage of technical, executive and managerial capability of private sector in designing, implementation and management of projects
  • Reduction of pressure of financial provision of infrastructural projects through the resources of public budget and reduction of dependence on oil revenues
  • Qualitative promotion of transportation infrastructures in order to increase people’s productivity via institutionalized opportunities in the development of transportation network

Attractions and Capacities

  • Iran’s strategic situation in the region and its access to free waters
  • Passage of international North-South and East-West corridors from Iran and high level of transit of goods and passengers through the country
  • Necessity of development of transportation infrastructures in order to create proportion between the existing roads and the vast area and population of the country
  • Growing demand for roads because of the increase of population and economic-tourist activities
  • Reinforcing the transit network with respect to the capacity and expanse of mines, factories and existing mother industries in the country
  • Low rate of risk in comparison with investment in the capital market
  • Increase of income and guaranteeing the capital return as a result of exploitation of transportation network projects due to annual increase of demand
  • Possibility of stage by stage exploitation of project and using previous stages income in construction of new stages
  • Possibility of using the direct income of projects in the period of exploitation and modifying the rate of commutation toll and secondary revenues of project
  • Supporting value engineering studies in order to decrease the time of construction, finished price and acceleration of exploitation and capital return
  • Existence of research centers, labs and specialized faculties
  • Existence of experienced contractors and advisory engineers and enjoying forces specializing in every field of road construction with international criteria
  • Existence of production industries for various kinds of coating materials, equipment, signs and specialized machinery in the field of road construction