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Tue, Jul 08, 2008

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Reinventing Tehran
Arak Airport to Be Privatized
Q1 Exports Earn $5.8b
Outage Costs
Compiled by Ghanbar Naderi
Multimodal Transport Workshop at ECO
SP Phase 6
Platform Installed

Reinventing Tehran
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Planners of Tehran Comprehensive Plan aspire to repeat the successes that other major world cities have attained in planning over the last decade.(Photo By Ali Hassanpour)
Tehran Municipality and a number of government organizations and ministries have devised and ratified a comprehensive development plan for the capital. Planners of Tehran Comprehensive Plan aspire to repeat the successes that other major world cities have attained in planning.
As a result of the partnership between Tehran Municipality and the affiliated organizations such as the ministries of housing and urban development, roads and transportation, and Tehran City Council, the plan, also known as Tehran Urban Management Strategy, includes watershed management, integrated local land-use and district planning/housing, district governance, green space corridors, environment protection, sustainable transportation and constructed boundaries or city limits.
According to ISNA, Tehran Comprehensive Plan concerns the following:

Illegal Construction
High on the agenda of the plan is to deal vigorously with illegal construction projects in the cosmopolitan city. Henceforth, the municipalities will be obliged to stop illegal construction work and deal with all governmental or non-governmental parties that might be responsible for them. This will include housing cooperatives affiliated to government organizations, the Judiciary, municipalities, armed forces and public institutes.

Safety Standards
Under the plan, it will be illegal to build residential units smaller than 35 square meters. In addition, permission to construct strategic and important buildings on the city’s major fault lines will be rejected.
There will be no construction permits for places that are prone to landslides.
In addition, new construction permits will not be issued for districts 21 and 22 in a bid to stop the expansion of the city towards Karaj.

Population Needs
The city had a population of 8.7 million in 2006 but programs are underway to meet the needs of 9.1 million inhabitants. Under the new scheme, there are now sufficient resources to meet the basic needs of 10.5 million people.

Decentralization
Urban security is also high on the agenda of the new scheme. Planners have laid emphasis on the importance of providing security for the city as the center of governance. To this end, new strategic centers will be set up in other parts of the country to reduce dependency on the central government in times of crisis. This will also reduce the sensitivity and the importance of Tehran in critical situations.
Tehran Municipality has also been obliged to pave the way for the decentralization of the government.
The plan welcomes the development of small and environmental friendly business in and around the capital. High-tech small businesses will gradually replace polluting firms and warehouses. Under the plan, Tehran will have to be managed by sustainable resources and there should be less dependency on revenues from taxation and housing permits.

Renovation Incentives
Incentives will be provided to renovate dilapidated houses and structures to encourage their owners to take part in local building construction projects. These policies will include supervision of renovating and rebuilding old structures that might need assistance and devising special and unified development projects for old neighborhoods.

City Limits
Tehran Municipality has been obliged to specify the city’s official limits, especially from the north, by installing special signs. The capital’s present limits are Tehran, Rey, Shemiranat, Eslamshahr and Robat Karim as well as part of the sections of Qods and center of Shahriar--except Joqin Village.

Upgrading Services
Plans are also underway to make optimum use of the remaining empty spaces of the city as well as reclaimed rundown areas by building and completing the remaining urban infrastructural projects, green spaces, public and cultural parks, and service and leisure centers.
Lastly, municipalities have been obliged to build local parking lots even for buildings that do not have parking space. The new parking lots will be built in collaboration with private businesses and local partnerships.

Arak Airport to Be Privatized
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Arak Airport in Markazi province will be sold to the private sector, announced head of Public Relations Office of State Airports Company.
The company has held talks with a domestic investor to bring Arak Airport at par with international standards, Yadollah Aqaei-Saem explained, ISNA reported.
Currently, Arak Airport is considered as one of the least busy airports of the country, he pointed out.
Once the privatization process is completed and airport services are developed, it will turn into a profit-making enterprise, the official assured.
Aqaei-Saem continued that following Ramsar Airport, Arak is the second airport which is up for privatization.
State Airports Company welcomes investment and proposal offered by private sector for participating in development of low-traffic domestic airports, he underlined.
Under the deal, all operations at the airport, with the exception of flight safety, security, control and macro management, will be handed over to the private sector, the official concluded. Some 20 airports will be privatized in the future.
According to the Fourth Five-Year Economic Development Plan (2005-2010), Iran’s Privatization Organization, affiliated to the Ministry of Economic Affairs and Finance, is charged with setting prices and selling shares of state enterprises to the public.

Q1 Exports Earn $5.8b
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Non-oil commodities including gas condensates valued at some $5.8 billion were exported in the first quarter of the current Iranian year which began on March 20.
This indicates an increase of 27.69 percent compared to figure for the same period last year, according to IRNA.
Some 9.9 million tons of goods were exported during the period, showing a growth of 2.16 percent compared to last year’s figure.
In the same period, export of non-oil commodities, with the exception of gas condensates stood at 8.17 million tons and valued at $4.2 billion.
Also, some $7.89 million of the total amount of non-oil commodities were exported through border markets, while $10.64 million worth of goods were taken out of the country as carry-on luggage during the period. Major export commodities included propane, butane, natural gas, pistachio, iron ore and steel.
The main export destinations of Iranian non-oil commodities were the UAE, China, Iraq, India and Japan. Some $12.9 billion worth of commodities were also imported during the said period.
The main exporters to Iran were the UAE, Germany, China, South Korea and Switzerland. During the same period, over 13,434 automobiles, worth $275.2 million, were imported, indicating an increase of 96.39 percent compared to the figure for the same period the previous year.

Outage Costs
Compiled by Ghanbar Naderi
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With an annual growth of 6 to 8 percent in demand for electricity and a population estimated to reach 100 million by 2025, Iran cannot rely exclusively on oil and gas for its energy needs.
Iran will need to increase power generation capacity to meet growing demand for electricity. According to the Energy Information Administration, energy intensity in Iran is 30 percent higher than in the Organization for Economic Cooperation and Development countries. Also according to FACTS Global Energy, Iran’s electricity demand is projected to grow at six percent per year through 2015.

Deficit
Electrical outage is a frequent occurrence now. At the behest of the Energy Ministry, the media publicized timetables for blackouts in Tehran and elsewhere so that people could adjust their daily routines.
“Total generation of electricity nationwide is 32,000 megawatts whereas consumption is 34,000, so the deficit has to be removed by reducing consumption,“ said Energy Minister Parviz Fattah, according to Fars News Agency.
He advised the people to lower consumption. However, experts say that poor maintenance of power grid as well as the complexities of managing transmission and distribution networks are also responsible for the frequent outages.

Costs
Sudden power outages can greatly disrupt social and economic activities of citizens and firms. Historically, the vast majority of power disruption in Iran occurs due to damages to the distribution network of a utility, usually during inclement weather conditions.
Outages pertaining to generation or transmission failures are less common, as regulators require vertically integrated utilities to maintain a generating margin in electricity production and reliability reserves in their transmission system.
Regardless of the specific cause of a service interruption and the regulation status of the utilities involved, the development of efficient policies to reduce the risk of blackouts requires knowledge about the economic costs they cause to customers and businesses. There are only a few studies on outage costs to residential and business customers in the published literature of this country.
With higher electricity usage and insufficient construction of new generating capacity in some areas of the country, rational management of the risks of power outages will become more, not less important in the coming years.
Rational management calls for an understanding of whether the benefits of actions to improve reliability outweigh the costs. Given the complexities of managing a transmission and distribution network, it is crucial that utilities or regulators be able to disaggregate their costs and benefits as much as possible so that they can effectively target projects to those that would benefit the most.

New Sources
In Iran, multiple sources of power generation are being explored. One option for meeting electricity demand includes using fuel oil for power generation, which is particularly efficient for plants located close to oil refineries. Iran also plans to boost natural gas production use to meet its electricity demand.
Hydroelectric plants and nuclear power program (a ’mother industry’ needed for economic and industrial development of the nation) will also be part of Iran’s overall electricity plan if technological advances, investment and political pressure allow.
State-owned Power Generation, Transmission and Distribution Company, Tavanir, and other regional subsidiaries dominate the power sector, and are responsible for power generation, transmission and distribution. However, the government has also moved to attract private investment to the electricity sector.
A study by Stanford Research Institute has concluded that Iran’s present electricity requirements are far greater than had been predicted and Iranian cities suffer from hours of power failures to save energy.
With an annual growth of six to eight percent in demand for electricity and a population estimated to reach 100 million by 2025, Iran cannot rely exclusively on oil and gas for its energy needs.

Multimodal Transport Workshop at ECO
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Workshop on Multimodal Transport of the Economic Cooperation Organization (ECO) began on Sunday at the ECO Secretariat in Tehran. It is the first of ten workshops to be held during 2008 under the auspices of joint ECO/IDB/UNCTAD project on Multimodal Transport, Moj News reported.
The workshop will provide an opportunity for stakeholders to discuss multimodal transport (MMT) and its potential benefits for national economy, shippers and transport providers.
Participants will analyze obstacles to MMT in the ECO region. They will draw up a set of concrete recommendations and deliberate on outlining technical assistance and investment proposals for development of MMT.
The two-day workshop will be addressed by experts and officials from UNCTAD, International Multimodal Association (IMMTA), and relevant national institutions.
About 50 key stakeholders from government and private sectors, policy makers, high level officials, forwarders/logistic providers, associations, customs officials, lawyers and transit experts are attending the workshop.

SP Phase 6
Platform Installed
The 2,800-ton offshore platform of Phase 6 of South Pars gas field development project was installed successfully Sunday.
The platform was loaded on the related jackets already installed 105 kilometers off Asalouyeh, 60 meters deep in the Persian Gulf waters.
With the completion of the operations, South Pars’ phases 6, 7 and 8 will become operational in the near future, according to Mehr News Agency.
South Pars--the biggest gas field in the world, shared between Iran and Qatar--contains 1,900 trillion cubic feet (tcf) in situ and 56 billion barrels of condensates in both parts.
South Pars field is the name of the northern part, which is located in Iranian waters and the North Dome is the name of the southern part, which is located in Qatari waters. South Pars field was discovered in 1990 by NIOC.
Production started from the southern extension of the field, the North Dome in 1989, at production rate of 800mmscf/d of gas. Gas production started from South Pars field with the commissioning of development phase 2 in December 2002 to produce 1bscf/d of wet gas. The field consists of two independent gas-bearing formations, Kangan and Upper Dalan. Each formation is divided into two different reservoir layers, separated by impermeable barriers. Therefore, the field consists of four independent reservoir layers K1, K2, K3 and K4. Iranian sections contain 500 tcf of gas in situ and around 325 tcf of recoverable gas. The three phases of 6, 7 and 8 will produce 158,000 barrels of gas condensates per day and 1,600,000 tons of liquefied butane and propane gas yearly for export.
Sadra Marine Industrial Company has constructed the platforms of South Pars’ phases 6, 7 and 8.

Turkmen, Kazakh Rail Link Underlined
Russian President Dmitry Medvedev has called for the quick implementation of Iran-Turkmenistan-Kazakhstan railway link. He made the statement following talks with Turkmen President Gurbanguli Berdymukhamedov.

Metal Exports
Over 187,000 tons of metal products worth $96 million were exported from Khuzestan province during March 20-June 20, provincial Industries and Mines Department announced.

EconomyCol2
TSE Index Improves
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Tehran Stock Exchange (TSE) has secured the top place among World Federation of Exchanges’ member stock markets since the start of 2008.
TSE index has so far witnessed a growth rate of 20.75 percent, Borna news agency reported.
Meanwhile, shares of leading auto-manufacturing group Saipa was identified as the most valuable stock in the bourse. Over 548 applicants applied to buy its shares last week.
The company’s stock, with over 1,854 transactions, recorded the highest trading in the bourse. Saipa shares have been sold even at the high price of 2,086 rials per share.
It is anticipated that the profit of each share of Saipa would be 806 rials and its capital (assets) would exceed 9.6 trillion rials.
Tehran Stock Exchange, Iran’s largest capital market, opened in April 1968.
CCCI Mission Accomplished
A delegation from the Cyprus Chamber of Commerce and Industry (CCCI) recently concluded its first business mission to Iran.
“There is ground for great potential for cooperation in real estate and in the export of Greek Cypriot products,“ a press release by the CCCI said.
“The business mission to Iran was successful,“ the CCCI recorded.
According to IRNA, the group comprised mainly of Greek Cypriot businessmen, primarily from the construction and financial sectors. The chairmen of the two country’s chambers, Manthos Mavromattis and Mohammad Nahavandian, took part in a meeting in Tehran which was also attended by the Cypriot ambassador to Iran.
Representatives of the two country’s stock exchanges and capital markets also held meetings during which they discussed prospects for cooperation, especially in research and the promotion of Iranian high technology products to southern Cyprus.
It is expected that a delegation of Iranian businessmen will reciprocate the visit.

Price Inspections Stepped Up
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Companies involved in producing, packing and selling tea feel there is a strong need for supervisory bodies, said deputy head of Tehran Commerce Department for supervision affairs.
Yadollah Sadeqi explained that experts and inspectors of the office have put more pressure on those charging high prices, Fars News Agency reported.
About 13 corrupt companies were identified last week, he underlined.
These companies have been accused of overpricing due to the failure to comply with the legal profits for wholesalers and retailers as well as putting unrealistic price tags on commodities, the official pointed out.
These cases, involving a total of over 3.6 billion rials worth of goods, were referred to Tehran Inspectorate Department, Sadeqi said.
As per Article Two of State Inspectorate Law, the department took legal actions against the mentioned companies since their activities had led to price hikes and losses to customers, he explained.
Highlighting that the department is ready to counter those who inflate prices, he said people can contact the 124 hotline to report cases of economic wrongdoings.

Malaysia Ties Discussed
Ways of expanding economic relations between Iran and Malaysia were discussed in a meeting between the foreign ministers of the two countries.
In the meeting, held on the sideline of the 11th session of the Eight Islamic Developing Countries’ (D-8) foreign ministers in Kuala Lumpur, the two sides reviewed the present level of ties in the fields of housing and energy.
Iran’s Foreign Minister Manouchehr Mottaki said that there are ample potentials for cooperation between the two countries which should be used properly.
The latest regional and international developments were also reviewed in the meeting, IRNA wrote.
Referring to the important geopolitical location of Iran in the Middle East, Mottaki said that the Islamic Republic has always resolved a portion of the problems faced by the region in the past 30 years.
Malaysian Foreign Minister Rais Yatim for his part called for two countries officials to make every effort to further enhance ties.
The D-8 comprises Iran, Bangladesh, Egypt, Indonesia, Malaysia, Nigeria, Pakistan and Turkey.
This is the first time that Malaysia is hosting the D-8 Summit.

Oil Prices Ease After Iran Offers Talks
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Oil prices eased in Asian trading on Monday after Iran offered over the weekend to negotiate on its nuclear drive, dealers told AFP.
New York’s main oil futures contract, light sweet crude for August delivery, fell $1.56 to $143.73 a barrel from Thursday’s close of $145.29. US markets were closed Friday for the Independence Day holiday. Brent North Sea crude for August delivery fell one cent to $144.41.
“There is some kind of relaxing on the part of Iran,“ said Tony Nunan, a manager with Mitsubishi Corp’s international petroleum business in Tokyo. “So any kind of reduction in tension there will take some of the price pressure off,“ he said.
Driven partly by international tensions over Iran, oil broke a series of price records last week, continuing the momentum begun at the start of the year when oil pushed through $100 for the first time.
The price surge has triggered fears about inflation and slower economic growth, while sparking protests around the world.
Iran on Saturday offered to negotiate on its civilian nuclear program but without a freeze on uranium enrichment, in its first comments since responding to an international package aimed at ending the standoff.

Buyout Spats Bruise Many
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Spats over the last remaining leveraged takeovers forged during the private equity boom have mostly been resolved, but Wall Street banks, buyout firms and the companies they target have been left more than a little bruised.
A crucial issue for future deals is private equity firms, banks and buyers finding ways to protect themselves and ensure others can’t easily pull out of deals or litigate.
But some of the trust that once existed between major parties in the business is now in doubt, Reuters wrote.
It seems every banker, lawyer and private equity executive has a war story about deals that have been scuttled, delayed or revamped in the past year.
The private equity buyers are facing up to the idea that they probably overpaid during their zealous shopping sprees for companies in 2006-2007.
Some of these investments may now run into trouble in an economic downturn which could be ugly and prolonged, especially given how debt-laden many are following the leveraged takeovers.

GM Will Shed Jobs
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General Motors Corp is planning to cut thousands of white-collar jobs and is considering whether it should sell or stop production of more of its brands, The Wall Street Journal said, citing people familiar with the matter.
Both moves are part of a broader re-evaluation of the company’s strategy and of its ability to meet an internal projection of returning to profitability in 2010, the people told the paper.
The job cuts are likely to be approved when GM’s board of directors meets in early August, the people said. The reductions would be in addition to earlier announced cuts. Management may also present the board with options for raising additional cash, they told the paper.
The board may also hear management’s latest thoughts on whether GM should trim the number of brands it offers in the United States. All but the Cadillac and Chevrolet brands, which GM considers core to its business, are undergoing close scrutiny.
In the past few years, as GM has run up massive losses, some board members and some executives have on occasion raised questions about its plethora of brands, only to be rebuffed by Chief Executive Rick Wagoner.
GM has put its Hummer brand up for sale to prospective buyers thought to include Mahindra & Mahindra, but the SUV brand is expected to fetch far less than $1 billion in any sale.

Singapore Property Market Cooling
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Singapore’s booming residential property sector is finally showing signs of cooling but projects including two casino developments should underpin long-term prices, analysts told AFP.
The market was described by real estate giant Jones Lang LaSalle as the world’s hottest in 2007, when the city-state’s property prices surged 31 percent overall.
But this year the sector has not escaped wider concerns over a US-led global economic slowdown and inflationary pressures. Private home prices rose 0.4 percent in the second quarter, the slowest increase in four years, the government’s preliminary figures showed last week.
The second-quarter rise was also much slower than the 3.7 percent increase recorded in the previous three months but prospective buyers waiting for huge bargains may be disappointed.