Incentives have been considered for investors to boost investment in industrial townships.

Organization of Industrial Townships of Iran has been countering the activities of real estate and property dealers in industrial townships since March 2007 with the aim of checking artificially inflated land prices.
Expressing this, head of the organization, Amirreza Vaezi-Ashtiani added that buyers of property in industrial townships have to pay special charges which are used for creating infrastructural facilities, reported the Persian daily ’Abrar-e Eqtesadi’.
Given the rise in the number of units commissioned in the year to March 2008, he said that about 2,394 units became operational in industrial townships during the period. This indicates a 43-percent increase compared to 1,670 units inaugurated in the year to March 2007, the official underlined.
“Over 44,300 jobs were created by these factories in the year to March 2008 against 34,245 jobs in the previous year, indicating a 30-percent growth.“
According to him, each unit in the industrial township has created an average of 19 jobs.
Highlighting that currently about 17,000 production units operate in industrial townships, he said about 380,000 persons work in these units.
Vaezi-Ashtiani continued that close to 25,000 manufacturing units are under construction in industrial townships. Once operational, these units will generate over 600,000 new jobs within two or three years, he predicted.
Article 29 of Fourth Five Year Economic Development Plan (2005-2010) has obliged relevant ministries to supply energy required by industrial townships, the official pointed out. The cabinet has also obliged all relevant bodies to supply energy to industrial townships at the factory or workshop, he said adding that the cabinet decision should be ratified by the Parliament.
Stressing that about 30-40 percent of the infrastructural costs in industrial townships pertains to energy, he said that once the bill is put into force, the cost of creating infrastructure facilities would drop sharply. “About 30 percent of all factories nationwide are located in industrial townships.“
On the policies of the organization to fix the price of land in industrial townships, he noted that price of land in industrial townships located in deprived regions would be specified.
In the Iranian year to March 2009, the price of land in four metropolises of Tehran, Isfahan, Mashhad and Tabriz will be determined as in the previous year, Vaezi-Ashtiani said.
“Excluding the above-mentioned cities, the prices of lands in industrial townships of other parts of the country would not rise. Instead, buyers will be entitled to a 50-percent discount.“
Incentives have been considered for investors to boost investment in industrial townships, he said. One of the incentives is to extend the loan repayment period for production units which are made operational earlier than schedule, he said, noting “For those who commission their factories within a year and create 10 new jobs, the number of installments for repaying the loans would increase to 35 from 30. And if they generate 50 jobs, the number of installments would rise to 50.“
Also, investors who create 50 jobs in deprived regions would be provided with free land in industrial townships, he concluded.

World Bank has granted $100 million in loan to Iran for renewal of old urban structures in the cities of Bandar Abbas, Kermanshah, Zahedan, Sanandaj and Tabriz, deputy minister of housing and urban development told Mehr News Agency.
Abolfazl Mousavi added that the World Bank is to pay another $800 million to Iran for renovating 13 other cities.
In the last Iranian year to March 19, 2008, over 600 billion rials ($65.7m) worth of participation bonds were issued by municipalities to restore old urban structures, he noted.
The World Bank offers a limited number of grants to assist development projects, grants that are designed to encourage innovation, co-operation between organizations and to increase local stakeholders’ participation in projects.
Some grants are funded directly from the bank’s administrative budget. The bank also administers or manages other grant funds for donors through partnerships and trust funds.
All grant funds are housed under the Development Grant Facility, where the bank integrates its overall strategy, allocations and management of grant-making activities under a single umbrella mechanism.

Secretary of Central Bank of Iran Mahmoud Bahmani on Tuesday rejected rumors about restrictions on transactions conducted by Bank Melli of Iran.
“Bank Melli is not under any sanction. This is just a rumor and there is no room for concern in this respect,“ Bahmani told IRNA on the sidelines of an annual conference on Iran’s monetary policies.
“Iran’s banking system and its officials have adopted necessary measures to deal with any probable sanctions,“ Bahmani said.
He declared that all Iranian banks are conducting routine transactions with foreign banks.
Iran, he said, welcomes cooperation between any foreign bank and their counterparts in Iran. He added that five to six foreign banks are scheduled to set up branches in the country.
Bahmani said that the first foreign bank would begin operations in Iran from Wednesday. He did not mention the name of the foreign bank.
He said that activities of foreign banks in Iran would take place in line with the country’s policy to create a competitive atmosphere in the banking system.

High Council for Housing has decided to charge real estate brokers or those buying and selling property several times a year between 25 and 30 percent of the propertyÕs value as tax.

Given the concern about the level and growth of real estate prices, there have been calls for an increase in taxes on housing as a way to curb demand.
For this reason, the High Council for Housing decided to charge real estate brokers or those buying and selling property several times a year between 25 and 30 percent of the property’s value as tax.
According to IRNA, the new law will go into force from November.
Rapid increase in the price of houses has been a major focus of debate in recent weeks. The government is worried that the rise in house prices has been well above the growth in earnings. This is not sustainable in the mid-term. The rise in house prices may be of concern for a variety of reasons, such as the inability of first-time buyers to purchase property, high debts relative to income and the effects of house prices on more general macroeconomic stability. Changes in house prices appear to have a greater impact on consumer spending in Iran than in other economies.
In recent years, Iran’s construction market has been thriving due to an increase in national and international investment to the extent that it is now the largest in the Middle East.
Central Bank of Iran statistics indicate that 70 percent of the Iranians own homes and huge amounts of idle capital enter the housing market.
The annual turnover in the construction industry amounts to $38.4 billion. Statistics from March 2004 to March 2005 put the number of total Iranian households at 15.1 million and the total number of residential units at 13.5 million.
Each year there is a demand for 750,000 additional units as young couples get married.
The housing industry is one of the few segments of the Iranian economy in which the share of state capital is as little as two percent, and the remaining 98 percent is private sector investment.
There is little red tape or hurdles and, as a result, the housing market can be made more accessible by launching mass development projects, using new technologies and ensuring speedy implementation of projects.
This is also true for construction materials and technological advances. Thousands of foreign firms, mainly Chinese or European, have established agents in Iran or partnerships with domestic manufacturers, both investing directly in the housing market and targeting other Persian Gulf markets.
Real estate prices surged by more than 100 percent in 2007, after rising by about 65 percent in 2006 and more than 50 percent in 2005. Some economists see greater scope for prices to keep rising as, with interest rates below inflation, Iranians seek to maintain the value of their money by going for property.
“The high prices might be a bubble,“ said economist Reza Abdizadeh. “It might be fake and illogical. But it is a fact. Historically, housing prices have never dropped in Iran. The government might be able to stop prices from rising but it will not succeed in reducing them.“
With one million prospective owners coming to the market each year, Iran is capable of constructing only 600,000 new homes annually.
Foreign capital has also played a major role in the market given the money repatriated by Iranian expatriates which analysts believe has increased since 2006.
Economic recession in the West have also accelerated the flow of capital to Iran, said economist Bagher Safarian.

A memorandum of understanding on assembling 10,000 Samand sedans in Azerbaijan Republic was signed in the city of Shamakhi, 120 kilometers from Baku on Tuesday.
Head of Trade Promotion Organization of Iran Mehdi Ghazanfari and Managing Director of Azerbaijan’s Elite Industrial and Trade Group Ali Ousan signed the deal on the sidelines of the First Azerbaijani International Business Conference in Shamakhi, IRNA reported.
Managing director of Export Promotion Bank of Iran Kourosh Parvizian and Iran’s Ambassador to Azerbaijan Naser Hamidi-Zare’ also took part in the event.
Based on the MoU, about 10,000 sedans including 4,000 Samand EL sedans, 4,000 Samand LX cars and 2,000 Samand Soren cars will be assembled at Elite factory in Shamakhi with the assistance of Iran.
Also, Azerbaijan Investment Promotion and Advisory Foundation and Iran signed a contract based on which the two countries would increase cooperation in various economic fields.

Iran and Turkey are moving towards concluding an agreement on phases 22 to 24 of Iran’s giant South Pars gas field development project.
A delegation from Turkish Petroleum Corporation (TPAO), which held talks with officials from Iran’s Pars Oil and Gas Company last week, is to announce its views on signing the deal on the $3-4 billion project.
The negotiations followed an earlier visit by an Iranian delegation to Turkey in March and after the Turkish side asked for time to conduct further studies, PIN reported.
A memorandum of understanding, allowing TPAO to produce 20 billion cubic meters of natural gas in the three phases of South Pars gas field, was signed on July 13, 2007 between the former Iranian oil minister, Kazem Vaziri-Hamaneh and Turkey’s Energy Minister Hilmi Guler.
Both sides also agreed that Turkey would use Iran as a transit for transferring Turkmenistan’s natural gas to that country.
Irked by the agreement, the US brought pressure on the Turkish government to withdraw from the project, but Turkish Prime Minister Recep Tayyip Erdogan defended the deal, saying, “We import oil and natural gas.
We want to reduce the amount we pay for our imports.“
He stressed, “Iran would let Turkey develop three gas wells without a tender process as part of the deal, which will also allow gas to be piped from Iran and Turkmenistan to Europe.“

Cement production capacity has increased to 53 million tons annually with the inauguration of the third production line of Sepahan Cement Factory in Isfahan, said Industries and Mines Minister Ali Akbar Mehrabian.
While inaugurating the factory, he said that only three projects, out of the 17 which were incomplete in the last Iranian year (ended March 19), remained to be put on stream, reported ISNA.
He added that Sarouj Cement in Isfahan, Delijan Cement in Markazi province and Neka Cement in Mazandaran will be commissioned by June 20 further raising annual cement production capacity to 55 million tons.
The minister stated that the figure is expected to reach 64 million tons and 110 million tons by March 2009 and 2013 respectively.
He said that the per capita cement consumption is projected to reach 920 kg by next March, adding the figure was 450 kg when the incumbent government took office in 2005.
Criticizing the lack of variety in cement production, he said that presently 9 types of cement are produced in the country, while the figure is 45 worldwide.
He called for diversifying cement production.