Iran, France Mulls Broader Transport Cooperation

Iran and France are considering the expansion of mutual cooperation in the transport sector that has helped bilateral economic relations thrive after the signing of the landmark nuclear deal between Iran and world powers in July 2015, which led to the removal of sanctions in January 2016.

In a meeting held in Tehran on Sunday with French Economy Minister Michel Sapin, Iran's Minister of Roads and Urban Development Abbas Akhoundi referred to aviation deals signed in the past between the two countries, noting that the Islamic Republic and France should also expand collaboration in road, rail and marine transport sectors.

"We can hold serious discussions regarding logistics among Iran, Europe and Central Asia," the Iranian minister was quoted as saying by the Roads Ministry's news service.

The transportation sector has been prioritized by the government of President Hassan Rouhani. The government has signed billions of dollars worth of deals to procure ships, planes, trucks and rail equipment, and to develop facilities in ports and airports among other agreements.

Amid the government's tight budget due to the low oil price that has led to underinvestment in domestic infrastructures, Iran has turned to foreign investment, which is now accessible in the absence of economic restrictions.

"France is willing to cooperate with Iran in other transport modes [in addition to aviation]," Sapin said in the meeting.

"Our plan is not just to sign short-term contracts. France is thinking of sustainable contracts and long-term cooperation with Iran."

He referred to the "good prospect" of cooperation with Iran in the rail sector, expressing his country's readiness to participate in the renovation of Iran's rail fleet.

As for the road sector, Akhoundi called for France's participation in a project to replace aging transit trucks in Iran.

As part of an agreement between the Ministry of Roads and Urban Development and Oil Ministry, the government is planning to replace 65,000 dilapidated trucks within five years.

Sapin said the French government is "more than satisfied" with the deal between Iran Air and Airbus for the former to purchase 100 passenger planes, adding that the same trajectory should be followed in other fields.

The flag carrier received its first Airbus jet on January 12 and is expecting two deliveries in the coming days.

The deal, including 46 of the narrow-body A320 family that includes the A321 model, 38 long-haul A330s and 16 of Europe's newest long-range model, the A350, has an estimated catalogue value of $18-20 million, though Iran says it is paying no more than $10 billion to Airbus.

Other French firms have also tapped into Iran's aviation sector.

French construction firm Vinci SA signed a memorandum of understanding for the development of Mashhad International Airport, also known as Shahid Hashemi Nejad International Airport, on the sidelines of a business forum held in Tehran early February.

Vinci had previously signed a preliminary deal with Iran for the development of the airport as well as that of Isfahan International Airport during President Hassan Rouhani's visit to France in January last year.

Vinci is a French concessions and construction company founded in 1899. With a workforce of over 179,000, the firm is the largest construction company in the world by revenue.

Iran has also signed an agreement with French aerospace company Thales Group to buy three airport surveillance radars for Tehran's Mehrabad International Airport and airports of the southern cities of Shiraz and Bandar Abbas.

The new state-of-the-art radars will replace the dilapidated equipment that have been in use in Iran's airports, including the one in Mehrabad which is 18 years old, to facilitate landings and increase flight safety.