TEHRAN, July 26--A senior Ministry of Economic Affairs and Finance official said here on Tuesday that the Central Bank of Iran (CBI)'s accountability for monetary policies would be meaningless if the parliament were to determine the amount and rate of participation bonds issued by the government.
Seyyed Hamid Pour-Mohammadi, deputy minister for banking, insurance and state companies' affairs, told ILNA that the parliamentary rejection of the government's double-urgency bill for permission to issue participation bonds will not help efforts to reduce the ever-increasing liquidity and inflation rates.
"Blocking efforts to attract liquidity will lead to a rise in the liquidity (growth rate) and will have destructive monetary and inflationary impacts on the national economy," he said, adding that the law has entrusted the issuance of participation bonds to the CBI.
The official said that participation bonds are issued each year to regulate the monetary market and control liquidity, adding that such policies are approved by the High Economic Council.
The government issues participation bonds to finance national projects in view of its failure to fund thousands of development projects nationwide.
Participation bonds are CBI-guaranteed documents indicating the purchaser's participation in funding a given national project.
The government announced in April it has suspended major development projects following the decision to settle domestic liabilities. The government has allocated funds initially earmarked for development projects for repaying its debts for the first half of the year to March 2006.
Some 80 percent of the development funds are spent on education, health, defense and subsidies in Iran, where there are thousands of incomplete development projects.
The government has been under fire for its failure to allocate adequate funds for development projects in provincial areas as most provinces face serious financial problems.
Experts say a constant growth in the government's current expenses would hurt efforts to fund development projects nationwide.

Iran's National Petrochemical Company held its annual general assembly on Tuesday in Tehran. (IRNA Photo)

TEHRAN, July 26--President Mohammad Khatami said here on Tuesday that economic development plans should pay more attention to downstream oil industries, stressing that the petrochemical sector would help create jobs for well-educated youths. Speaking at the annual general assembly of the National Petrochemical Industries Company, the president said that the development of the petrochemical sector would help improve the national economy and boost competition in the energy sector. He praised the national petrochemical industry's efforts in recent years to improve research and training activities. The Khatami administration's performance in the petrochemical sector has come under fire in recent months with a number of experts and even senior officials criticizing the government for selling petrochemical products at low prices. Petrochemical units reportedly sold their products at a total of 4.8 trillion rials below international prices in the year to March 2005. With this amount, experts say, the industry could have constructed a 700,000-ton petrochemical unit. Mohammad Ehtiati, managing director of the Petrochemical Commercial Company, said earlier the difference between market prices of petrochemicals and their international prices has caused huge financial corruption and rent-seeking activities. Oil Minister Bijan Namdar-Zanganeh said corruption and rent-seeking activities have been on the rise in the petrochemical market, adding that fixed prices and market instabilities are to blame for this. Iran will climb to the 35th spot on the world petrochemical rankings by March 2006 following plans to commission 15 refineries in the hydrocarbon-rich region of Asalouyeh in the coming months.

TEHRAN, July 26--Oil Minister Bijan Namdar-Zanganeh said here on Tuesday that over $300 billion worth of oil industry agreements have been concluded in the past eight years.
According to ILNA, he defended his 22-year performance as a minister, stressing that he managed to improve the hydrocarbon energy industry despite heavy pressures from the pro-reform government's opponents.
Rejecting reports that the Oil Ministry has handed over the development project for Darkhoin oilfield to a foreign company despite the fact that an Iranian company had proposed $800 million less for doing the same, the minister said he is not willing to respond to lies.
"Some people think that we are illiterate and unable to calculate simple functions," he said, adding that there are some non-specialists who insist on their views about energy contracts.
"How is it possible that a company offers $800 million less for implementing a $500-million project," he said, criticizing the conservative-dominated Islamic Republic of Iran Broadcasting (IRIB) for airing every criticism of the Khatami administration.
"But I do not think that it (IRIB) would continue to do so in the future," he said in reference to the president-elect Mahmoud Ahmadinejad's government.
Asked why the people failed to see the actual result of higher oil prices on their tables under the Khatami administration, Zanganeh said the 'people, unfortunately, had nothing on their tables other than oil (revenues)'.
Mahmoud Ahmadinejad won the key June 24 presidential election with a high-profile mandate of economic and social justice, promising the people that they will 'see the actual outcome of the rise in oil revenues on their tables'.
It remains to be seen how the incoming president will manage to fulfill his pledges in light of the fact that the Tehran Stock Exchange (TSE) has not yet fully recovered from a massive panic selling that followed the result of the presidential election.

TEHRAN, July 26--A senior stock market official has said that the Stock Exchange Council has agreed in principle to the establishment of the much-publicized oil bourse.
Heydar Mostakhdemin-Hosseini, who heads the board of directors of the council, told Fars news agency that the council, in its Monday's session, also tasked the Oil Ministry to formulate necessary mechanisms for the establishment of the oil bourse in line with the country's general stock market policies.
"The issue of setting up the oil bourse will be finalized once the Oil Ministry presents the outcome of its studies on the organization and articles of association of brokerage firms," he said, adding that stock market software would be created in partnership with foreign parties.
Once established, petrochemicals, crude oil and oil and gas products will be traded at the petroleum exchange, known as oil bourse.
The oil exchange would strive to make Iran the main hub for oil deals in the region as most deals will be conducted via the Internet.
Iran announced in September its petroleum exchange will be operational by March 2006.
Experts from International Petroleum Exchange (IPE) and the New York Mercantile Exchange (NYMEX) have reportedly confirmed the feasibility of the project.
Experts say the petroleum exchange can help create further transparency in the Oil Ministry's performance and help attract more foreign investments in national energy industries.
The proposal was first put forward in the beginning of the Third Development Plan (2000-2005) and became a national project in 2003. Relevant technical studies are still underway.

NEW DELHI, India, July 26--Petroleum Minister Mani Shankar Aiyar here on Tuesday denied any differences within the government on the $4.16-billion Iran-Pakistan-India gas pipeline and said New Delhi was going ahead with the project as scheduled.
"I am exactly on the same wave length as the prime minister. The decision of going ahead with the pipeline is in accordance with his direction," Aiyar said.
According to PTI, Prime Minister Manmohan Singh's comments in Washington last week that the project was fraught with risks and it would be difficult to get an international consortium of bankers to underwrite the project, were seen as contradicting Aiyar's optimism and had led to speculations that New Delhi was wary of going ahead with the project.
"I met the prime minister for one hour on Sunday and again on Monday.
The message I got was absolutely clear, there is no going back. A schedule has been laid out and we are going by it," Aiyar said.
Technical, commercial, financial and legal arrangements besides involvement of international consortia of bankers and global firms for laying and operating the pipeline would make the pipeline safe and secure, he said.
There are apprehensions that any pipeline passing through Pakistan runs the risk of being sabotaged and the project itself might be held hostage for political gains.
There are also apprehensions that given the US sanctions against Iran, international bankers may stay away from funding the project.
"Schedule of meetings (between India and Iran, and India and Pakistan) has been laid down till the end of December and they are being maintained," Aiyar said.
Officials believe that the project could be financed on strength of Indian Oil Corp/Oil and Natural Gas Corp balance sheet and that safe delivery of gas could be ensured if technical parameters like laying the pipeline at least 1.5 meters below the ground and Pakistan drawing gas for its use from the pipeline at a point very close to Indian border were adhered to.
Besides host government agreements, corporate guarantees and stringent supply or pay agreements were being worked out to guard Indian interest.
Two separate technical groups between India and Pakistan and India and Iran are conceptualizing the project structure so as to make it safe and secure and address all risks, the minister said asserting that the dialogue would continue.

TEHRAN, July 26--An official of the Ministry of Labor and Social Affairs said here on Tuesday that the foreign policy apparatus could help ease unemployment by contributing to efforts to find new international job markets for Iranian laborers who fail to get employed at home.
Parviz Sa'adati, who heads the Overseas Employment Promotion Department of the Ministry of Labor and Social Affairs, told ISNA that the country needs to try to adapt to the global job market conditions.
He said that the foreign policy machine has to develop the country's economic interactions with the world, while the higher education system is required to train specialists.
Noting that the country needs to dispatch surplus workforce overseas, the official said Iranian diplomatic missions could help create overseas job opportunities.
"The Foreign Ministry and the Management and Planning Organization should work to materialize overseas employment (for Iranian workforce)," he said, adding that if a university graduate cannot find a proper job in the short term, he or she should be able to take job opportunities offered on the international markets.
He called on the Foreign Ministry and Iran's Customs Administration to render greater consular and customs services respectively to Iranians working abroad, adding that such workers could help bring in hard currency.
Sa'adati told ISNA earlier that Iran will dispatch several hundred workers to Germany, South Korea and probably Italy and Portugal. He said the present mechanisms for sending workforce to other countries would change.
"We know from experience that we need to hand over overseas employment affairs to the private sector," he said, adding that the Association of International Job Consultants would be in charge of sending 510 workers to South Korea.
He rejected claims that the initiative would give rise to brain drain, saying that while the country has so many jobless university graduates, it needs to seize employment opportunities in the four corners of the globe.

Soroush oilfield, which is located some 82 kilometers southwest of Kharq Island, was discovered in 1962.

TEHRAN, July 26--The groundbreaking project to develop Soroush and Norouz oilfields in southern Iran officially became operational on Tuesday in a ceremony attended by Oil Minister Bijan Namdar-Zanganeh.
According to ISNA, oil production from the two fields has reached 190,000 barrels per day. The project was implemented by Royal/Dutch oil and gas giant Shell. Under the buyback deal,
Shell will recoup its investments from the oilfields' revenues within seven years.
A total of 1.6 billion dollars has been invested in the project.
Oil Minister Bijan Namdar Zanganeh said earlier that Iran's oil production capacity will increase by 200,000 barrels per day in the near future.
The minister told reporters that the increase in production capacity is expected to come after Soroush and Norouz oilfield development projects become operational.
Development project for Soroush and Norouz oilfields, which were expected to become operational in late 2003, was delayed several times. The British and Dutch conglomerate, Royal/Dutch Shell is in charge of the development phase. Iran's Offshore Oil Company will be in charge of the production phase.
Soroush oilfield, which is located some 82 kilometers southwest of Kharq Island, was discovered in 1962.
Norouz oilfield, discovered in 1966, lies 93 kilometers northwest of Kharg Island and 53 kilometers from Soroush oilfield.
National Iranian Oil Company and Shell Development Iran signed a buyback contract to develop the two oilfields on Nov. 13, 1999, at an estimated cost of $1.4 million.

TEHRAN, July 26--A leading manufacturer of auto electrical components in India has signed a contract with a private Iranian company for the production of starter motors.
According to Fars news agency, the one-million-dollar agreement was reached between India's Lucas-TVS and Feiz-e Qadir Industries Company of Iran.
The Iranian company's managing director, Asadollah Rahimzadeh, told reporters that the value of the joint venture could rise to five million dollars in the next five years.
The Indian side has a 65-percent stake in the joint venture, he added.
The Iranian company's share in the domestic production of starter motors will rise to 25 percent from the initial 10 percent once the project goes on stream.
He said the joint venture will be expanded to include the production of windshield wiper motors and dynamos.
The products will be used in car engines produced by the giant carmaker, Saipa.
Lucas-TVS manufactures the most comprehensive range of auto electrical components in India. The products are designed to meet the demands of vehicle manufacturers both in India and worldwide. One of the top ten automotive component suppliers in the world, the company designs, manufactures and supplies advanced technology systems, products and services to the world's automotive industries.