'Silk Road and Trade' train (Photo by Mehdi Khoshnevis)

TEHRAN, May 2--A Turkish train, named ’Silk Road and Trade’, was in town on Sunday to exhibit that country’s major industrial products and foodstuffs on its way from Ankara to Almaty, Kazakhstan.
Some 70 Turkish companies have put on display their latest products, including textiles, auto parts and foodstuff, in the train, which has 19 wagons.
Turkish officials have referred to the initiative as a turning point in efforts to revive the ancient Silk Road, stressing that it would also help bolster historical bonds among nations through which the road once traversed to promote regional trade.
The train is set to arrive in Mashhad, Khorasan Razavi, Monday and then leave the holy city for Central Asia.
Turkish Minister of State for Foreign Trade Tuzman Kursad said at the opening ceremony on Sunday that the value of bilateral trade is expected to reach $10 billion per annum in coming years,
stressing that the two countries could embark on huge trade and energy projects.
He said bilateral trade has jumped from $300 million in 1999 to $2.8 billion in 2004, adding that the figure will reach four billion dollars by next March.
Minister of Roads and Transportation Mohammad Rahmati said Iran is keen to witness significant growth in economic cooperation with Turkey, stressing that signing preferential trade agreements and creating banking facilities by the two sides as well as gas exports from Iran to Europe via Turkey are among the key measures in expanding two-way economic cooperation.
He said the Turkish exhibition train was a great idea that would help show how the Silk Road could once again be used to develop trade among countries en route.
The train would cover 10,000 kilometers from Ankara to Almaty.
Also on Sunday, the chairman of Iran’s Chamber of Commerce Industry and Mines (ICCIM) said the growth in Iran-Turkey trade in recent years is due to the economic reform policies of the two countries.
Speaking at the fourth session of Iran-Turkey Economic Cooperation Commission, Ali Naqi Khamoushi said investments by Turkish companies in Iran have increased remarkably following the approval of the new Investment Law here.
Kursad, who heads the commission, said the two nations have opened a new chapter in trade relations and by lowering non-tariff barriers, mutual trade could improve.
Turkey ranks seventh in terms of foreign investments in Iran and hopefully this ranking will be raised to second, he added.
He said that a potential area of cooperation is joint investments with the aim of boosting tourism between the two nations.
He proposed the expansion of transportation links between Iran and Turkey which could facilitate the latter’s access to Afghanistan and Pakistan.

TEHRAN, May 2--A senior oil industry official said here on Monday that oil well drilling for phases IX and X of the giant South Pars gas field development project will begin within a month following an agreement reached between Pars Oil and Gas Company and Oriental Oil Kish.
Akbar Torkan, managing director of Pars Oil and Gas Company, said Oriental Oil Kish has received the initial payment for the multimillion dollar project.
Iranian engineers have managed to successfully install the first of the two jackets of the offshore platform for phases IX and X. A US company, Halliburton, was awarded phases IX and X of the giant project earlier this year together with Oriental Oil Kish, but quietly pulled out amid mounting pressures from Washington.
The project to develop phases IX and X was set to involve 58 percent participation by the Iranian side and 42 percent in the form of foreign investment. It is estimated to take 52 months to complete the project.
The project includes onshore and offshore sections and its initial phase is to become operational by the first quarter of 2007. On completion, the project would produce 50 million cubic meters of treated natural gas per day for domestic use, a daily 80,000 barrels of gas liquids for export and a million tons of ethane for petrochemical industry, etc.
South Pars, which is believed to be the world’s largest gas field, is shared by Iran and Qatar. It is estimated to hold almost 14.2 tcm of gas--equal to seven percent of the world’s total and 38.6 percent of Iran’s reserves.
South Pars field in the Persian Gulf has been divided into 25 phases.
Iran holds the world’s second largest proven gas reserves after Russia.

Iran's flora products remain substandard.

TEHRAN, May 2--Flora exports increased by 100 percent during 2000-2004 to reach $1.4 million, said the Agriculture Jihad Ministry’s director general for flora affairs.
Speaking to ISNA, Mohsen Kafi however warned that flora production could turn into an unprofitable business if present traditional systems were to continue.
He expressed hope that the country’s flora terminals in Tehran, Markazi, Khuzestan and Mazandaran provinces would become operational within the next four years.
The official further stated that agriculture students must be allowed to become involved in major flora projects and contribute to lowering the prices on the domestic market in order to encourage cultivation.
He said Iran’s flora products remain substandard, stressing that excessive use of pesticides in greenhouses could be harmful to public health.
Some 10 million stalks of flowers were exported to Russia, Tajikistan and Azerbaijan as well as the Netherlands and the Persian Gulf littoral states in the year to March 2005. Some 900 million stalks of flowers were produced in the same period.
Experts believe that exports could grow by 30 percent in the year to March 2006, if the private sector manages to modernize the greenhouses in cooperation with the Ministry of Agriculture Jihad.
Five billion rials will be required to modernize each hectare of traditional greenhouses.
This is while a considerable amount of horticultural products are wasted each year due to traditional methods.
Low quality, poor marketing techniques, outdated packaging systems and high transportation costs are among the most serious challenges to the export of flowers from Iran. Shortage of funds, inadequate banking facilities, administrative red tapes, insufficient fertilizers, inadequate training programs and lack of modern genetic modification plans are other major problems facing the industry.

Shortfall in domestic demand for rice will not exceed 400,000 tons this year.

TEHRAN, May 2--A rice industry official said here on Monday the country would need to import a maximum of 350,000 tons of rice until March 2006, rejecting reports that one million tons of rice will be imported from Pakistan in the period.
Jamil Alizadeh Shayeq, secretary of the Rice Association, told Mehr news agency that the Commerce Ministry has also confirmed that the shortfall in domestic demand for rice would not exceed 400,000 tons this year.
He said the area under rice cultivation stands at 620,000 hectares this year and this could be increased by ten percent to accommodate high-yielding varieties.
Pakistani sources reported last week that Iran has removed import duty on rice traded via border markets and this will help exporters to cross the $750 million target for the current year.
Pakistani Commerce Ministry said the decision had come after a Pakistani commercial counselor had held a series of meeting with authorities in Tehran and had finally convinced them that the move would benefit traders from both sides.
Exporters believe that Iranian importers would book the bulk of Pakistani varieties, which could lead to the doubling of rice export figures to Iran.
The current fiscal year brought fortune for Pakistani rice exports, which witnessed several international incentives, coupled with increased prices of Pakistani varieties and good crop across the country.
Pakistani authorities believe the Iranian government might offer more benefit when high officials from the Commerce Ministry accompanied by a delegation of rice traders visit the neighboring country this month.

TEHRAN, May 2--Minister of Economic Affairs and Finance Seyyed Safdar Hosseini said here on Monday that the State Privatization Organization does not need the presence of private sector representatives in its affairs, stressing that the organization deals only with state properties.
The minister told Moj news agency that the private sector must not get involved in the process of ceding shares of state companies to private ownership via stock market.
Hosseini’s remarks come a few days after Mir Ali Ashraf Abdollah-Pouri Hosseini called on the private sector to play a more active role in privatization-related affairs.
He said the private sector needs to have a representative in the organization to oversee the pricing mechanisms.
Experts believe that the government must cooperate further with the private sector, if the privatization goals were to be achieved.
Abdollah-Pouri Hosseini said last week the government must not let private companies pay the price for its ’political red-lines’.
He said certain miscalculations in foreign policy equations would lead to a decline in foreign investments and flight of capital.

Most illegal workers are from Afghanistan, Pakistan and Iraq.

TEHRAN, May 2--At least 800,000 illegal foreign nationals are working across Iran, said a senior Ministry of Labor and Social Affairs official here on Monday, adding that their salaries would amount to over $1.32 billion a year.
According to ISNA, Jafar Alipour Behzadi, the ministry’s director general for foreign nationals’ employment affairs, told reporters that most illegal workers are from Afghanistan, Pakistan and Iraq, stressing that they should be repatriated in order make their jobs available to Iranian workforce.
“We managed to identify 65,000 illegal foreign workers in the year to March 2005,“ he said, adding that it would cost the government 40 trillion rials to create 800,000 jobs occupied by foreigners.
Behzadi said illegal foreign workers are employed only by the private sector companies, stressing that Tehran Municipality and Tehran City Council have also been asked to prohibit employment of illegal foreign nationals by their contractors.
He rejected reports that there are plans to induct 200,000 workers from Afghanistan, saying the Ministry of Labor and Social Affairs, which is in charge of issuing work permits for foreigners, has made no decision to this effect.
Behzadi said the ministry will fine any employer providing job to an illegal foreigner by up to 5,000 times the daily wage of a simple worker.

FRANKFURT, Germany, May 2--Iran’s planned purchase of Basell, a European company which is the world’s top maker of the plastic polypropylene, is becoming more difficult due to strong US opposition, sources familiar with the matter said, reported Arab Times.
Iran’s state-owned National Petrochemical Company (NPC) is trying to buy Basell from Germany’s BASF and Royal Dutch/Shell in a deal that could be Iran’s biggest commercial investment abroad since the 1979 Islamic Revolution.
However the transaction expected to be worth around 4.4 billion euros ($5.7 billion) has been complicated because some of Basell’s assets are based in the United States at a time when relations with Iran are extremely difficult.
A US State Department official said that the government had expressed its concerns to Basell’s owners, BASF and Shell, about a potential sale to Iran.
Sources close to the situation have said BASF and Shell are nearing a deal to sell Basell for the 4.4 billion euros either to the Iranians or a group of Indian investors, but that several deadlines to complete the transaction have slipped by.
A source familiar with the negotiations said on Sunday that US lobbying against the deal was making a sale to the Iranians difficult even though Iran claimed to be the leading bidder.
Iran said it was better-placed to buy polymer joint venture Basell than its Indian rivals and expects to be the final winner in the sale process, ISNA reported on Saturday.
BASF and Shell are set to decide within days on the sale of Basell to Iran’s NPC or to a set of Indian investors.
If successful, it would be the biggest commercial investment abroad by Iran since the 1979 Islamic Revolution.
“We are still negotiating for buying Basell but it has not yet reached a conclusion, although NPC is in a better position than its competitor,“ NPC Managing Director Mohammad Reza Nematzadeh was quoted as saying.
Netherlands-based Basell is the world’s top maker of polypropylene, used in a range of applications from auto steering wheels to packaging, and polyolefin products.