Construction projects in the Iranian capital Tehran

Chinese Construction In Tehran 'An Insult' To Local Expertise - Ex-Minister

Monday, 02/26/2024

A former Iranian minister said the government’s recent deals with Chinese companies to build residential units in the capital are an "insult to Iran's engineering community" while the local economy is in freefall.

A former Iranian minister said the government’s recent deals with Chinese companies to build residential units in the capital are an "insult to Iran's engineering community" while the local economy is in freefall.

“We have given China privileges that are unprecedented in our country,” said Ahmad Khorram, former Roads and Transportation Minister under President Mohammad Khatami, in an interview with Jamaran News website.

Earlier this month, Tehran’s municipality announced that China will soon start building housing units in the capital. Mayor Alireza Zakani said several contracts have been signed with Chinese companies to revamp the capital’s infrastructure, including construction and transportation projects, at the expense of local businesses amidst a crippling economic crisis. 

According to Khorram, such decisions are like “punching Iranian people in the face” and do not serve their interests. “Our private-sector companies are much smarter and much more specialized than the Chinese ones … If they [Tehran’s municipality officials] give this concession to Iranian contractors, they will run with enthusiasm to get the project off the ground.”

Ahmad Khorram, a cabinet minister in the late 1990s and early 2000's reformist government

Lambasting the close ties between Tehran and Beijing, the reformist politician stressed that China has undertaken the projects in return for buying Iran’s sanctioned oil 30 percent below the global price.

“The 30 percent oil money they don’t pay is all profit for them. For 25 or 30 percent of the rest of the oil money, they export goods to Iran, and by giving us goods, they make more than 50% profit,” he pointed out.

According to reports, China’s importation of oil from Iran increased by 60 percent in 2023, with Tehran selling 90 percent of its oil to Beijing. International tanker tracking companies say a huge amount of Iranian oil is sold to China via middlemen and brokers and by ship-to-ship transfers which take place in international waters. The cargoes are mostly rebranded as Malaysian oil but apparently Malaysia does not interfere.

Khorram further noted that building housing units will also guarantee a profit of over 100 percent for the Chinese companies. According to the former minister, Tehran provides Beijing with all these privileges to guarantee its support in the UN Security Council.

Both China and Russia have collaborated with the US over banning Iran’s nuclear program and were the first countries to back the Security Council’s resolutions against Iran, he went on to say.

Earlier in February, economic journalist Reza Gheibi told Iran International that Chinese encroachment into Iran's construction sector would have adverse effects related to opacity in the financial details of the scheme and its impact on local companies. There has been no word from the Chinese side confirming such a deal.

Tehran grapples with severe housing and transportation challenges, characterized by exorbitant real estate prices that are beyond the means of ordinary Iranians, who can barely afford rent.

According to Iran's leading economic daily Donyaye Eqtesad (World of Economy), owning a home in the Iranian capital Tehran has become virtually impossible while key indicators of quality of life are also in decline. The average time people need to save money to be able to buy a residence in Tehran has increased to a staggering 112 years, from about 22 years in 2005, the report added.

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