Iran’s Demands For Wagons To Be Supplied Domestically In Next 3 Years

Iran’s economy has been taking off since the nuclear agreement was signed over two years ago, and reliance on foreign imports to meets the demands of its railways is no exception.

“The majority of the country’s demand for wagons [railcars] will be supplied domestically in the coming three years,” Akundi said, according to reports by Iran’s Mehr news agency.

Based on a joint agreement reached last year, Iran will import 1,100 freight cars from Russia and jointly produce another 5,000 units in Iran. Since March, Iran has been under contract with Russia’s United Wagon Company to supply 6,000 freight cars within three years to Iran, of which 4,900 will be manufactured in Iran.

Other Russian companies have also signed railway contracts with Iran. On July 31, Iran's Industrial Development and Renovation Organization (IDRO) signed an agreement with Russia’s Transmashholding Company to set up a joint venture for manufacturing railcars. That deal is valued at €2.5 billion, or around $3 billion. According to the deal, Transmashholding will have an 80 percent stake in the venture and acquire the Iranian railroad car manufacturing company Wagon Pars Company. IDRO will hold the other 20 percent, and management of the venture will be rotational. The company is expected to churn out 2,000 new cars.

Russia possesses one of the world's most extensive rail networks as well as the largest industry for manufacturing of rail cars and locomotives, making it an ideal partner for Iran, which is in need of cars as well as the capacity to build a domestic industry.

The Iranian Railway Company owns an active rolling stock fleet of 24,000 freight cars and 2,000 passenger railcars as well as 100 locomotives. In July, Saeid Mohammadzadeh, the head of the Islamic Republic of Iran Railways, announced that the country’s railway network requires 28,000 new wagons in order to carry out a wide-ranging refurbishment of the country's rail system over the next ten years.

In July, the French transport company Alstom inked an agreement with Iran for the construction of metro and suburban railroad cars. Alstom will have a 60 percent stake in the project, while IDRO and Iranian Rail Industries Development Co (IRICO) will each invest 20 percent. As part of the deal, a railroad car construction factory will be built in Abhar, located in western Iran, where 1,000 rail cars will be built.

On December 2, South Korean rolling stock manufacturer Hyundai Rotem signed a contract worth €720 million with the Iranian Railways to produce 450 suburban railbus wagons. Hyundai Rotem will produce 150 cars in South Korea, with another 300 to be assembled in Iran under a technology transfer agreement.