Close to 20 percent of electricity is wasted in the country which is eight percent above global standard.

Energy Minister Parviz Fattah observed that the government and the Majlis have to revise electricity rates to plug the ministry’s budgetary shortfalls, especially in the electricity sector.
“Electricity charges for household consumption have to be increased to approximate cost prices,“ the minister stressed in an exclusive interview with ISNA on Friday.
He recalled that in recent years, the government did not pay any fund to Iran’s Power Generation, Transmission and Distribution Company (TAVANIR). “Budgets earmarked by the government for TAVANIR were ’zero’ until recently and the company had to manage on its earnings from electricity charges.“
The minister contended this method is practiced by countries all over the world. The governments in the West not only pay no money to the electricity sector but also a portion of their revenues is supplied from electricity sale.
According to him, price of each kilowatt/hour of electricity is minimum 10 cents in European Union and 19 cents in other countries. Fattah put the figure at 150 rials (about 1.5 cents) in Iran which is way below the cost prices.
Consequently, deficits have to be compensated for by the government funds--a practice which the Ahmadinejad administration has continued in the past two years as well, he added.
The minister put state subsidies allocated for electricity sector at 5,000 billion rials during the year to March 2008.
“This is while the sector needs 40,000 billion rials of investments not to mention the money required for maintenance, fuel and repair costs as well as wages of administrative personnel. So, currently there is a gap between ministry’s incomes and expenditures.“
On strategies to resolve the problems, Fattah suggested that prices should be revised even if the revision contributes to inflation.
The minister recommended, “Even through the Majlis and the government are reluctant to revise the prices for certain reasons, they should pay the ministry the balance between energy production and sale prices.“
He noted that close to 20 percent of electricity is wasted in the country which is eight percent above global standard.

Employees received about 76.9 billion rials in loans from Mehr-e Reza Fund for 865 schemes during the year to March 2007.

Ministry of Labor and Social Affairs and Social Security Organization of Iran (SSOI) have signed a memorandum of understanding to provide redundancy (unemployment) insurance for contract-based workers.
The organization’s managing director was quoted by the Persian daily ’Iran’ as saying on Saturday that henceforth, contract-based workers who are constantly employed in permanent posts would come under unemployment insurance benefits.
Speaking at a nationwide gathering on redundancy insurance in Shiraz, Fars province, Davoud Maddadi further noted that coordination is made with Bank Refah Kargaran to extend a 100-million-rial loan to employees who hire those receiving unemployment benefits from the organization.
He observed that implementation of a scheme to reemploy people receiving SSOI benefits will help Unemployment Insurance Fund save over 1,000 billion rials.
The official recalled that in line with implementing the scheme, close to 2,121 people were reemployed in the year to March 2007. Loans paid by the organization via the bank helped prevent 2,372 workers from becoming jobless last year, he added.
According to the SSOI chief, employees (self-employed and others) received about 76.9 billion rials in loans from Mehr-e Reza Fund for 865 schemes during the year to March 2007. The schemes created jobs for over 1,339 people.
Elsewhere, elaborating on revenues and expenditures of Unemployment Insurance Fund, the official noted that some 15,700 billion rials was deposited to the fund in the 20 years to March 2007.
This is while the fund’s payments exceeded 16,350 billion rials during the same period.
According to him, some 1.3 million individuals were added to the list of those receiving unemployment benefits while 1.1 million were taken out of the list in the past two decades.

New round of talks between Iran, India and Pakistan on the so-called ’peace pipeline’ is to be held next week in Tehran.
The tripartite talks will be attended by Pakistan’s deputy oil minister, the deputy Indian petroleum and natural gas minister and Iran’s oil minister’s special representative, IRNA reported.
The last meeting was held on January 24, 2006 in Tehran in which all parties agreed on a pricing formula and some specifications were left for the future.
According to a report all parties seem to have reached the point that the contract should be finalized by the end of June.
Earlier, the Indian government said that the proposed $7-billion-plus Iran Pakistan-India (IPI) gas pipeline project has been found to be technically feasible but its economic viability will depend on the price at which Tehran sells the fuel.
“Indian side had appointed Ernst and Young as the financial consultants and ILF, UK, as the technical consultant for drawing up the pre-feasibility report of Iran-Pakistan-India pipeline project. The project has been found to be feasible .... The price of gas against alternate fuel prices will determine the economic viability of the pipeline project,“ India’s union minister of state of petroleum and natural gas, Dinsha Patel said in a written reply in the Rajya Sabha (upper house of the Indian parliament), Tuesday, an Asian Age report said.
Iran has given a formula for determining gas price at the Iran-Pakistan border. New Delhi is also discussing transportation tariff and transit fee to be paid to Pakistan for passage of the pipeline from its territory. “Once these issues are decided, the price of gas at Pakistan-India border would be known and then a decision on the purchase of gas through Iran-Pakistan-India pipeline project will be taken,“ Patel said.
He said that the pipeline within Iran up to Iran-Pakistan border will be laid and operated by an agency to be nominated by Iran. “Iran has offered to sell gas at Iran-Pakistan border and all responsibilities for the safety and security of the pipeline within Iran will rest with Iran,“ he said.

Leading Austrian beverage company, Ottakringer Co. signed a contract with Kilo Food Industries Co. to establish a factory specialized in manufacturing non-alcoholic malt beverages with and without fruit flavors.
The contract, worth 25 million euros, equivalent to $30 million, was formally inked by the Austrian Chamber of Commerce in Tehran, ISNA reported on Friday.
According to Ottakringer’s announcement, the factory will be based near Tehran, within a 200-kilometer distance from the capital.
In the first phase, lime-, raspberry- and apple-flavored non-alcoholic malt drinks will be produced.
The products of the factory are expected to be available on the market in two years.
The Austrian party will also assist marketing and promotion of the products and developing export.
Ottakringer spokesman Tomas Zawitz told BBC that construction operations are currently underway.
He further said that a shipment of Ottakringer beverages has been sent to Iran to introduce the company and its products to Iranian consumers.

Egyptians seem enthusiastic about reestablishing economic relations with Iran which is now directly influenced by the political climate.
Expressing this view, vice president of the Iran-Egypt Council Masoud Daneshmand told ISNA that both sides are looking forward to resuming economic relations.
He added that relations at charge d’affaires level is a prerequisite for establishing economic ties while Iranian and Egyptian governments are only maintaining interests sections in each others’ countries. “However, indirect transactions are continuing.“
Spare parts for cars, buses and heavy machinery which the Egyptians had earlier bought from Iran are supplied through re-exports via Dubai and raw material for the textile industry is imported by a third party, Daneshmand said.
“There are no official figures to refer to, but trade between the two countries are estimated at half a million dollars.“
A vast range of Iranian goods including petrochemical products, road construction machinery and spare parts have broad market prospects in Egypt and Iran can receive oilseeds, textile raw materials and rice from Egypt.
“The facts cast light on the market potentials of the two countries, still on the back burner waiting for direct economic relations,“ Daneshmand said.

Islamic bonds are becoming more and more popular and many western countries are turning to ’Sukuk’ to raise funds in Islamic countries.
Islamic Development Bank Advisor Shahin Shayan Arani said this at a workshop titled ’Fund-raising via Sukuk’ on Thursday adding that these bonds are easily classified and tradable in secondary markets, IRNA reported.
Local and foreign investors rushed to subscribe to the world’s biggest-ever Islamic bond issue worth $3.5 billion Sukuk for the second phase of the Dubai airport project, breaking the record of $1.5 billion worth of bonds sold in American projects, he continued.
Shayan Arani pointed to countries such as Japan, Germany and the US that are publishing Sukuk and said the progress of Islamic bonds means a new source of funds for vital infrastructure projects and a way to keep funds working when it comes to dealing with investors that do not want to apply non-Islamic investment methods for religious purposes.
“Not to mention the efficiency of Sukuk in liquidity management in Islamic economic agencies.“
As described by Shayan Arani, Sukuk is a bond that complies with Islamic law and its investment principles, which prohibit the charging, or paying of interest and usury.
Sukuk permits financial assets that comply with the Islamic law to be classified in accordance with their tradability and non-tradability in secondary markets.
The ’Islamic bond’ issue has not clearly been discussed in Iran yet and no organization is recognized to be officially in charge.
The ’Fund-raising via Sukuk’ workshop was sponsored by the Leasing Companies’ Center with the help of the Central Bank of Iran and the stock market.

Despite the domestic demand for 10 million cellphone handsets during the year to March 2007, only 1.5 million mobile phones were imported, said a senior official with the Organization for Supporting Consumers and Producers.
According to Persian Daily ’Iran’, deputy head of organization’s Coordinating and Inspection Affairs Center stated smuggled cellphone handsets are dominating the market. “Some 80 percent of the market is currently supplied with mobile phones smuggled into the country which are not covered by after-sale services,“ Mohammad Hassan Nematollahi pointed out.
He observed that problems in registering cellphones officially brought into the country by passengers, high prices as well as pricing by Iran’s Customs Administration have also made mobile phone market more chaotic.
“Producers, who had earlier intended to manufacture cellphone handsets at home, are currently becoming discouraged. So far only two companies have embarked on launching assembly lines for domestically-manufactured mobile phones.“
The official recalled that tariffs set by the Majlis for semi-knocked down (SKD) devices prevent rent-seeking but makes production of cellphone handsets from SKDs non profitable.
So, producers have to forget about making cellphones from SKDs and turn to producing from completely knocked down kits which is more difficult, he added.
Nematollahi underlined that registration of mobile phones brought in by passengers or by official importers make the situation worse and contribute to smuggling.
Over five million cellphone handsets used by the public have fake registration numbers and IranCell and Taliya companies have not yet joined the registration system, he stressed.
Recalling that the government increased import tariffs of cellphone handsets in the year to March 2007, imports declined by half during last year compared to figures for the year earlier.
Some $71 million worth of cellphone handsets were imported during March 21-May 21, 2006 (prior to decision by the government to raise import tariffs).
The figure reached $62 million during the remaining 10 months of the year to March 2007 which experienced import tariff rise, Nematollahi said.
Last year’s cellphone demand was estimated at eight million to 10 million while only 1.5 mobile phones officially entered the country.
“In other words, 80 percent of the market was supplied by smuggled cellphones. So tariff hike ultimately caused imports of cellphone to decline considerably and smuggling to increase significantly,“ the official criticized.

Massoud Mir-Kazemi

Saudi Arabia and Iran are to set up a joint commerce committee to study grounds for economic cooperation.
An agreement to the effect was reached between Tehran and Riyadh following Iran’s Commerce Minister Massoud Mir-Kazemi’s visit to Saudi Arabia last week.
Head of Iran’s Trade Development Organization and Deputy Commerce Minister Mehdi Ghazanfari, who accompanied Mir-Kazemi on his Saudi visit, expressed hope that the visit would bring a new era in bilateral relations.
Speaking to IRNA on Saturday, he added that officials of Tehran and Riyadh have voiced disappointment over meager volume of trade ties which stood at less than one billion dollars.
“Iran and Saudi Arabia have agreed to usher in a new era in bilateral trade and have made serious determination in this respect,“ he said.
He called for exchange of high-ranking economic delegations to discuss management of the oil revenues of the two countries.
Ghazanfari hoped that issues relating to customs agreements and avoidance of double taxation would be settled and trade ties between both sides would be increased more than ever before.