The construction sector has been experiencing unparalleled growth in Iran with the total value of its projects reaching $97 billion.

The 8th International Construction Industries Exhibition and the 6th International Kitchen, Bath, Sauna, Pool Equipment Exhibition are being held concurrently at Tehran’s International Permanent Fairgrounds from August 7-10.
Some 847 foreign and domestic companies are showcasing their construction products in an area of 80,000 square meters during the four-day event.
This is while over 208 Iranian and foreign companies, active in manufacturing kitchen, bath, sauna and pool equipment, are participating in the exhibition spanning over 14,000 square meters, IRNA reported.
Introducing the latest achievements and state-of-the-art technologies in construction fields and preparing the ground for establishing direct contacts between domestic and foreign companies are among the key objectives of this year’s events.

Phenomenal Growth
The Iranian construction sector is experiencing phenomenal growth and the four-day exhibition in Tehran offers an opportunity to showcase the sector’s potentials in meeting the country’s requirements.
The growth in the sector has led to massive demand for construction products and technologies.
The exhibition is the region’s most comprehensive sourcing platform for witnessing the sector’s development of construction machinery, equipment, vehicles, attachments and spares at the international level.
With projects worth millions of dollars currently underway in the Iranian market and Persian Gulf states, the construction sector is at an all-time high.
Iran, the UAE, Kuwait, Qatar and Bahrain are among regional states that are in the midst of a construction frenzy and also have several major infrastructure projects lined up for the coming years.
The construction sector has been experiencing unparalleled growth in Iran and Iraq, with the total value of construction projects in Iran reaching $97 billion and in Iraq at $27 billion.

Investment Boost
Iran’s construction market has been thriving due to an increase in national and international investments to an extent that it is now the largest in the Middle East.
The annual turnover in the country’s construction industry amounts to $97 billion.
The Central Bank of Iran recently announced 70 percent of Iranians own homes, with huge amounts of idle capital entering the housing market every year.
Statistics for March 2006-7 put the number of Iranian households well over 16 million and the total number of housing units well over 14 million, signifying a demand for at least 5.1 million units.
Every year, 750,000 additional units are needed, as young couples embark on married life.
At present, 2000 units are being built everyday although this needs to increase to 2,740 units. This is only possible through a boom in real-estate development and foreign investment.
Restoration of old buildings is one of the priorities of the Iranian government.
Estimates show that about $143 billion are needed in the next 10 years for the renovation of 14,000 meters of old buildings.
The government will earmark 11.5 percent of the funds while the rest need to be raised through public investments and bank loans.

Competitive Environment
The housing industry is one of the few segments of the Iranian economy where state capital shares are as low as 2 percent of the market and the rest have been channeled by the private sector.
There is little red tape or hurdles and, as a result, a larger portion of the housing market is accessible through mass housing projects, the use of new technologies and the fast pace of project execution.
This is also true for new construction materials and technological advances.
Numerous foreign firms, mainly Chinese and European, have established agencies in Iran or partnerships with domestic manufacturers, both investing directly in the housing market and targeting other Persian Gulf markets.
This year’s exhibition is hosting 847 brands from countries, including Germany, Italy, the UK, Sweden, Turkey, South Korea, China, Japan, Belgium, the UAE, Canada, The Netherlands, Switzerland, Finland, Slovenia, Greece, Portugal, Spain, Malaysia, Hong Kong, Brazil, Austria and Taiwan.
Besides individual participation, the event will also be hosting country pavilions from Iran and Germany.
This year’s edition of International Construction Industries Exhibition has significantly grown in size in terms of exhibitors and exhibition space. The event will also witness the live demonstration of tower cranes, forklifts, earthmovers, concrete batching plants, other light- and medium-range machinery, equipment and vehicles.
Special products for the quarry, railroad and construction-engineering sector have also been displayed at the event.

Managing Director of Iran Customs Administration Ardeshir Mohammadi held talks with his Iraqi counterpart Jasem Mohammad Attieh on issues of mutual interests.
At the meeting on Tuesday, the two sides signed an agreement on increasing the working hours of border customs offices, holding joint monthly meetings, increasing the two countries’ customs transportation and establishing a joint free trade zone, ISNA reported.
Mohammadi also voiced the Islamic Republic’s willingness to conduct joint ventures.
“There is no obstacle to increasing economic and transit activities with Iraq,“ he said.

Agriculture Jihad Ministry has devised a new system for countering drought in the country.
Announcing this, deputy minister for herbal products, Mohammad Reza Jahansouz, said that based on the system, new methods will be used for undertaking cultivation in affected areas, IRNA reported.
A joint project has been undertaken with Forests, Pastures and Wetland Organization which, if implemented, will help restore damaged areas within two to three years.
Referring to the establishment of Iran’s geographical agriculture databank, in cooperation with Agriculture Jihad Ministry and State Deeds Registration Organization, he said that water shortage will be compensated by using a proper planting pattern.
He noted that a committee has been set up to reduce the impacts of drought.
“Based on the plan, groups comprising a senior manager and four experts will visit affected areas to take special measures in this regard,“ he said.
Stating that guidelines to counter drought have also been compiled, Jahansouz said more than 20 projects have been notified to the provincial departments for reducing the impacts of drought.

Each wagon of a passenger train involves 24,000 pieces, 90 percent of which are produced within the country, said deputy head of Raja Passenger Train Company.
Speaking to IRNA on Tuesday during a visit to the company’s Technical and Maintenance Section, Mohammad Hassan Esmaeili further said the company is doing its best to produce main parts of the wagons in a bid to cut dependency on imports.
“Currently, there are 100 decrepit wagons with a 40-year lifespan in the company’s rail fleet and we are obliged to keep them in use due to high demand,“ he said, noting that plans have earlier been made to phase them out soon.
The official further said a number of wagons as well as relevant technologies will be imported to improve the rail navigation system.
Some 50 six-bed wagons as well as 50 four-bed first-class wagons are being manufactured in cooperation with Austrian and Romanian companies respectively.
Esmaeili noted that the production of 200 four-bed wagons as well as 50 two-story wagons is also on the agenda.
“Raja Company has undertaken various projects to increase the number of passenger wagons,“ he said.

Saipa DieselÕs four new products are Renault Midlam 4 by 2 Truck, exportable Volvo FM9 and Mahsan 17+1 passenger minibuses model Y and T.

Head of the Industrial Development and Renovation Organization (IDRO) Ahmad Qalebani said auto manufacturing in Iran plays a key role in its economic and industrial development.
Addressing the inaugural ceremony for production lines of four new products of Saipa Diesel, he added, “It is necessary to upgrade the quality of locally manufactured vehicles.
“We hope that the national auto-making industry will become more competitive upon gradual reduction of tariffs.“
Saipa Diesel’s four new products are Renault Midlam 4 by 2 Truck, exportable Volvo FM9 and Mahsan 17+1 passenger minibuses model Y and T.
Qalebani recalled that the total sales of Saipa and Iran Khodro, two giant Iranian auto makers, will amount to between $17 billion or $20 billion this year.
Managing director of Saipa, Mehrdad Bazrpash told the ceremony that the share of Saipa Disel and Zamyad from the local commercial vehicles market last year was 20 percent, while the figure will reach 54 percent this year.
“In the first four months of the current Iranian year (started March 20), the two companies produced over 4,000 commercial vehicles,“ he added.
Bazrpash underlined that upon the renovation of 25 percent of the country’s road transportation fleet some 11 trillion rials could be saved.
“There are 100,000 dilapidated heavy vehicles in the country. We plan to renovate this fleet through a five-year plan,“ he pointed out.
He emphasized that 30 to 35 percent of road accidents directly or indirectly are linked to the dilapidated fleet of heavy and commercial vehicles.
Saipa (an acronym for Societe Annonyme Iranienne de Production Automobile) was established in 1966, assembled the two-cylinder Citroen mini passenger car, the Dyane, and manufactured licensed versions of the original Renault 5, Renault 21 and Kia Pride.
Production of the Saipa Pride continued until 2005 when then they introduced an updated model based on the Pride called the Saipa 141 while continuing to sell their version of the Pride under the names Saba and Nasim.
SAIPA also produces the Citroen Xantia under licence as well as assembling sedan models of the previous generation Kia Rio using parts imported from Korea. In 2000, SAIPA launched their own design, the 701 Caravan minivan, which was facelifted in 2003.
Also in 2000, SAIPA purchased 51 percent of Pars Khodro. The government owns 48 percent of SAIPA.
Other products include the Citroen C5 and C4 along with the Renault Tondar 90, a Renault Logan assembled by SAIPA and its subsidiary Pars Khodro in a joint venture with Renault known as Renault Pars, with over 100,000 orders within a week of it going on sale in March 2007.
The main subsidiaries of SAIPA Group are Saipa Diesel, Pars Khodro and Zamyad. SAIPA signed a Memorandum of Understanding with Malaysia’s Proton to jointly develop a new compact sedan to replace the SAIPA Pride.
Addressing the same inaugural ceremony, Managing Director of Saipa Diesel Ali Malek urged the government to procure the needed finances for the project to renovate road transportation fleet of the country.
“Based on Article 28 of the Fourth Economic Development Plan (2005-10), the government is obliged to decrease the lifespan of commercial fleet to 12 years from a previous 22.6 years,“ he noted.
Malek also said, “Outdated heavy vehicles use a great amount of fuel. Given the high subsidies that the government pays out for fuel, replacement of the dilapidated vehicles with newer ones not only helps reduce road accidents, but also helps reduce fuel consumption.“
He recalled that demand for commercial vehicles has seriously increased last year due to national economic growth, an increase in per capita production and the government’s policies to optimize fuel consumption.
“In the first four months of the current Iranian year, Saipa Diesel achieved a significant and unprecedented growth of 600 percent compared to the corresponding period of the previous year,“ pointed out Malek.

The government has been encouraging people to use energy-efficient light bulbs as the country experiences daily power cuts.
“The number of low-cost compact fluorescent lights (CFLs) distributed in the market will reach 20 million by the end of the Iranian month of Shahrivar (ending September 21),“ said the Managing Director of the Renewable Energy Organization of Iran Hossein Lavaei on Monday.
The government has allocated huge subsidies to make energy-efficient bulbs available in the market for less than half of the cost price, he told Presstv.
Price is seen as one of the biggest hurdles to widespread approval of the energy-efficient light bulbs.
The Islamic Republic has been suffering from daily power outages this summer because of a dramatic drop in rainfall which created a severe drought.
A shortage of electricity supply this summer has forced Iran’s Energy Ministry to ration electricity by scheduling power outages across both urban and rural areas that last up to four hours a day.
Officials hope that by swapping traditional light bulbs for energy-efficient bulbs Iran can dramatically reduce its high electricity consumption which has made power outages the order of the day.
The draught spell has worsened the power consumption with a 15 percent growth each year, while the supply shows only a maximum of seven percent rise.
“Power industry is costly, it takes time and requires long term planning, and we must go towards mobilizing ourselves for critical situation like this and be able to have at least 5,000 megawatts of electricity for back up,“ Mehrdad Abedi, A Tehran Polytechnic University professor said.
Power outage has become an order of the day when shortage of electricity has forced Iran’s power generators to ration electricity, leaving about a four-hour daily power outage quota in rural and urban areas.
Following a winter and spring drought, the dams were shut down highlighting the need for speeding up the alternative nuclear power project to generate electricity.
Currently 93 percent of the country’s electricity is produced by fossil fuel. Once the much-awaited nuclear power plant in Bushehr comes online, it will reduce the concerns over power outage.

The value of Iran-Turkey trade transactions will soon hit the $20 billion mark, the new Iranian ambassador to Ankara said on Tuesday.
According to IRNA, Bahman Hosseinpour put the two counties’ transactions at $10 billion to $13 billion, adding that the current level should rise in near future.
“My mission to Turkey is aimed at developing the two countries’ ties,“ he said, while voicing his country’s willingness to broaden bilateral ties in all spheres.
Hosseinpour served as Iran’s former consul general in Istanbul and former ambassador to Ethiopia.
According to the Turkish State Statistical Institution, Turkey exported $61.628 million worth of goods to Iran in February 2006 and imported goods worth $174.475 million from the country.
Turkey’s exports, valued at $108.732 million, to Iran during the first two months of 2006 pointed to a 73.19 percent decrease compared with the 2005 figure. However, its imports, valued at $495.43 million, from Iran during the same period pointed to a 45.9 percent increase compared with that of the previous year.
The total bilateral trade in the first five months of this year reached $4 billion.