China Civil Engineering Construction Corp announced on Tuesday itsigned a rail contract worth 3.53 billion yuan ($543.6 million) with Iran.
CCECC is a subsidiary ofstate-owned China Railway Construction Corp, a major construction group withbusiness in more than 60 countries and regions, its website reported.
The subsidiary signed thecontract with Iran’s Construction & Development of TransportationInfrastructures Company to develop a 263-kilometer railroad, according to anannouncement CRCC sent to the Shenzhen Stock Exchange on Tuesday, the Chinesedaily The Global Times reported, without specifying the location of the Iranianrail project.
The company belongs to theMinistry of Roads and Urban Development of Iran, the announcement said.
Following the removal ofnuclear-related sanctions against Iran, the country has attracted unprecedentedChinese funding for various infrastructural projects, including in the railsector.
Chinese state-owned investmentarm CITIC Group recently established a $10 billion credit line and ChinaDevelopment Bank is considering $15 billion more.
Iranian officials say the dealsare part of Beijing’s $124 billion Belt and Road initiative, which aims tobuild new infrastructure—from highways and railroads to ports and power plants—betweenChina and Europe to pave the way for trade expansion.
In eastern Iran, Chinese workersare busily modernizing one of the country’s major rail routes, standardizinggauge sizes, improving the track bed and rebuilding bridges, with the ultimategoal of connecting Tehran to Turkmenistan and Afghanistan.
Much the same is happening inwestern Iran, where railroad crews are working to link the capital to Turkeyand, eventually, to Europe. Other rail projects will connect Tehran and Mashhadwith deepwater ports in the country’s south.
China has provided a $1.6billion loan to fund the electrification of the high-speed 926-km railroad fromTehran to the eastern city of Mashhad. That was the first foreign-backedproject in Iran after the 2015 nuclear deal was signed.
Tehran-Mashhad Railroad is asegment of the so-called New Silk Road–a 3,200-kilometer rail project thatultimately sees Urumqi, the capital of China’s western Xinjiang Province linkedto the Iranian capital Tehran, connecting Kazakhstan, Kyrgyzstan, Uzbekistanand Turkmenistan along the way.
The idea was first proposed bychief engineer of China Railway Corporation, He Huawu, in late 2015, justbefore international sanctions imposed on Iran over its nuclear program werelifted in January 2016.
From Tehran, the grand projectwill join Iran’s east-west network leading to Turkey and East Europe. It couldalso open a way to Europe via a developing rail route from southern Iranianports to Azerbaijan and Europe.
The Belt and Road initiative–amega project that seeks to connect Asia, Europe, the Middle East and Africa–putforward in October 2013 by Chinese President Xi Jinping, includes severalcorridors through land and sea, including the New Silk Road rail route.
Business ties between Iran andChina have been growing since the United States and its European allies startedpressuring Iran over its nuclear program around 2007.
China remains the largest buyerof Iranian crude, even after western sanctions were lifted in 2016, allowingIran to again sell oil in European markets.
Chinese state companies areactive all over the country, building highways, digging mines and making steel.Tehran’s shops are flooded with Chinese products and its streets are cloggedwith Chinese cars.
Source: Financial Tribune