Iran is negotiating with Chinese and Turkish companies for building affordable government housing in a possible oil barter deal oil, an official said on Saturday.

Iran’s President Ebrahim Raisi (Raeesi) has promised to build one million apartment every year, during his four-year term to solve rising housing costs for ordinary Iranians squeezed by high inflation and a worsening economic crisis.

Ahmad Donyamali, a member of the state housing council told the Iranian Labour News Agency (ILNA) that the government is in talks with Chinese, Turkish and even a European company for contracting out part of the construction job and pay for it in oil.

News about Chinese companies participating in the construction project emerged in October but it was swiftly denied at the time.

Tehran faces two impediments in contracting with foreign firms. The first hurdle is to pay for goods and services amid a US banking sanction that threatens foreign banks with third-party sanctions if they deal with Iran. The second problem is lack of foreign currency.

US oil sanctions have substantially reduced Iran’s dollar earnings since 2018, forcing the country to dip into its foreign currency reserves, which observers say declines substantially in three years, although they might have marginally recovered this year.

An oil barter deal might specially work for Chinese companies that already import Iranian oil under the radar of US sanctions.

However, the promise to build 4 million apartments in 4 years amid an economic crisis might be more of a wish than a reasonable project for Iran.

Nuclear talks with the United States that could help lift sanctions are stalled at the moment and the outlook for Iran’s economy is bleak. The national currency that has declined tenfold in four years might dip to unprecedented lows if sanctions continue for another year.

The US has threatened to tighten the application of sanctions. Diplomats visited the United Arab Emirates this week to pursue the issue of actors in the region abiding by the US sanctions.

Donyamali, without naming any companies, said that negotiations have proven foreign firms are offering much better prices than their Iranian counterparts. A price of $100 per square meter ($9 per sqf) has been offered for building cheap, prefab apartment buildings. This means more than a $24 billion investment for 4 million apartments, money that Iran does not have now. He emphasized that Iran’s position is not pay any cash to foreign companies and is basing the talks on the principle of oil barter.

Iranian companies are asking almost double of what foreign firms are ready to accept, Donyamali said. Most Iranian companies in such a large project would be state or quasi-sate entities, some possibly linked with the Islamic Revolutionary Guard Corps, IRGC.

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