Iran ready to partner Turkey in $10 billion plan

Iran is ready to give partnership stakes to Turkish companies in its construction of roads, airports and railways for which the country has put aside $10 billion.

Over the next three to five years, Iran has many transportation projects on offer which it is ready to award some to “internationally proven Turkish companies,” Iranian Ambassador to Ankara Alireza Bigdeli said.

He said prospective Turkish corporations would be awarded contracts based on work partnership with Iranian companies without bids.

Ankara-based construction company Bergiz Insaat has already won a $1.2 billion project to build a highway between Iran’s northwestern city of Tabriz and Bazargan on the border with Turkey. It is also building an $800 million subway in Tabriz.

Commercial ties between Iran and Turkey remain strong. Trade volume stood at $14 billion last year which the two countries plan to raise to $30 billion.

Turkish President Recep Tayyip Erdogan visited Tehran in April and the two neighbors signed eight documents to expand cooperation and boost trade.

“We are working to improve trade in local currency with Turkey. We need a mechanism to protect businesspeople against extreme foreign currency fluctuations,” Bigdeli said.

In January, the two neighbors sealed a trade agreement after 10 years of negotiations that gave Iran preferred tariffs on some agricultural products and similar breaks to some Turkish industrial goods.

Iran also seeks a bigger share in Turkey’s energy market. Bigdeli said Tehran and Ankara have reached a preliminary agreement on Turkey’s increase of gas imports from Iran and a new gas pricing.

The two countries disagree on the gas price, with Turkey taking Iran to the International Chamber of Commerce in Switzerland.

Iran is Turkey’s second supplier of gas after Russia, providing for one-fifth of the country’s consumption. Turkey imports about 10 billion cubic meters of gas a year from Iran under a 25-year deal signed in 1996.

Turkey’s Halk bank handles payments for Iranian energy transactions but those operations have come under strain amid intensified sanctions on Tehran.

Bigdeli said Turkey’s state-run TC Ziraat Bankasi AS should also do business with Iran, Bloomberg reported.