Private initiative gaining ground in lran
Ready for the future
Not every dreamt-of economic boom in Iran has ripened to maturity. The country is nevertheless under-going dynamic developments that augur well for the future. Yousef Sherkati, CEO of TransInvest, and Parviz Golabi, managing director of the PTB Group's Perse international Forwarding Company, spoke to Christian Doepgen recently about new infrastructure projects and other business opportunities.
The hype surrounding business with lran, which arose in the last few months on account of the lifting of most of the sanctions against the country in January, has subsided in the meantime. What new trading opportunities do you expect to open up in the future?
We don't believe that progress will come in leaps and bounds. Over-all, the prospects for business with Iran are very good, however; so we do, for example, expect multinational corporations to set up shop in the country, amongst other commercial developments.
Ongoing impediments to transferring funds are proving to be one of the key problems; and banks are being careful - BNP Paribas was fined USD 8.9 billion in 2015, after all. How do you deal with this?
The first international banks are currently finding their way back to Iran. Commerzbank, for example, has announced plans to undertake activities in this direction. We're in the happy position of having the Liechtenstein-based Bank Alpinum in our group, however. We're establishing capacities to finance trade to and from Iran which will not only be beneficial to our own activities, but also to export businesses.
80 % of lran's transport industry is said to be state-owned. How does this affect your activities as a private enterprise?
Very positively! We're pleased with our good collaboration with the state, and have recently also experienced the trust it places in the business acumen of private logistics firms.
You're referring to one of your latest projects...
Yes. A few weeks ago we won the tender to run the Aprin rail hub, located about 20 km southwest of Teheran. 'We've been awarded the concession to develop the facility on 55 ha of land directly on a main railway line. We're planning to build the hub in 3 years and then operate it for 22 years. We're set to invest approximately USD 2.5 million in the concomitant infrastructure.
“A few weeks ago we won the tender to run the Aprin rail hub.”
That's quite a large project, in any case. What is the overall significance of the new rail terminal?
Iran is structured in such a way that the region around the capital Teheran attracts the greatest amount of traffic. Estimates put the number of freight trains shuttling to and from greater Teheran at up to 60 a day.
The Centre’s importance is also based on the existing railway network, which is due to be greatly expanded. The country currently has a railway network covering around 11,000 km; 1,800 km thereof is double-tracked. Now the network is going to be expanded by another 9,500 km. New links to the Iraqi rail network via the border town of Shalamcheh, and the Afghan network via Khaf and Sangan, are on the drawing board.
What are your plans for Aprin?
Construction will take three years and we'll operate the centre for 22 years. The facility, which will initially have the capacity to handle 400,000 teu annually, will become the most important railway hub in greater Teheran. Approximately 50% of lran's imports are consumed or distributed in this region, by the way.
In March the first train on the New Silk Road from China reached Teheran, How significant are rail operations in lran, in your opinion?
There is a great potential for rail in lran. The first test train from Yiwu reached Teheran in 13 days. If we continue with this link then the train can be routed through Aprin.
We operate a rail freight connection between Bandar Abbas and Teheran, amongst other things. We can haul containers over that distance in three days, thanks to our good cooperation with the customs authorities. What's more, our prices are 60% better than truck haulers’.
The lifting of most sanctions has created new opportunities in Bandar Abbas, lran's largest port.
We want to make the best of these new opportunities, which is why we've asked the port authority for the green light to expand our terminal compound there by about a quarter, that is by 110,000 sqm. The new areas are earmarked for handling and warehousing facilities.
How will you ensure that they are used to capacity?
We act in cooperation with our clients. Foreign investors are building three fertiliser plants in Uzbekistan and Turkmenistan, with annual capacities to produce around 2 million t of fertilisers. About 75% of the output of the two Uzbek and one Turkmen plant are set to be exported to Asia and Africa. 'We'll manage the logistics needs.
Do such relocations represent an international trend?
We believe so, yes. A few corporations, such as Nestle, have already started producing in Iran; others are sure to follow. There are good business prospects for the export of petrochemical products and minerals, for example. In 2014 iron ore exports alone amounted to around 18 million t. We're sure these volumes will return when global market prices start to rise again.
What is transit's share of your traffic?
We estimate that transit traffic accounts for around 45% of our volumes. Southbound, about 70% thereof is bulk. The 30% that is northbound includes containerised goods.
How does PTB ensure that the supply of trained staff keeps up with growth?
We've have good experience in training capable graduates in-house, and are also very satisfied with Fiata's training courses. Today many of our former employees work in leading positions in other Iranian firms.