Italy, Iran to sign €1.2bn rail deal next week

Iran and Italy will sign a deal worth 1.2 billion euros next week to build a high-speed railway between the central cities of Arak and Qom. 

Renato Mazzoncini, CEO of Italy's state railway company Ferrovie dello Stato (FS), will visit Tehran on July 11 to finalize the construction of the 135-kilometer line.

It is the first stretch of a high-speed rail line which FS plans to build in Iran, with the other being a 320-km planned link between Tehran and Hamadan.  

The overall deal is worth 5 billion euros which Ferrovie initially signed under a framework agreement when former Italian Prime Minister Matteo Renzi visited Tehran with a delegation of business leaders last April.

FS will supply assistance to the Iranian railways for both high-speed and conventional rail lines, including a complete program for training personnel, the company said at the time.  

The group has also been connected with the planning and construction of a high-speed rail corridor between Tehran, Qom and Isfahan, and electrification of the rail link between Tehran and Tabriz on the way to the Caucasus and Turkey.

Iran and Italy have signed deals potentially worth billions in sectors including energy, railways and defense. Italy's export agency and state lender has pledged billions of euros in credit lines and guarantees.

Beside FS, oil major Eni, electricity and gas distributor Enel, oil contractor Saipem, steel firm Danieli, infrastructure firm Condotte d'Acqua, rail and road company Gavio, and airplane manufacturer Finmeccanica are the companies which have undertaken big ticket investment plans in Iran.

Italy's state-run lender Cassa Depositi e Prestiti has offered credit lines to companies building oil-and-gas and transport infrastructure, while export agency SACE has committed to guarantee those loans.

The agreements were reached when Renzi visited Iran with by a delegation of some 60 business leaders - three months after President Hassan Rouhani traveled to Italy.

Iran’s transport expansion includes aligning with the regional rail networks in the Persian Gulf and the subcontinent to Central Asia. The country has announced plans to invest $25 billion over the next 10 years in the modernization and expansion of its railway network.

The country plans to stretch out the nationwide railroad line to 25,000 kilometers by 2025 from under 15,000 kilometers now, with 7,500 km already under construction.

“The main objective in the rail transportation sector is to complete the entire network and shift some of the road transportation to rail, given the development of industries and mines in Iran,” Minister of Roads and Urban Development Abbas Akhoundi has said. 

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