Tehran Metro Expansion Plan Facing $8 Billion Deficit

EghtesadOnline: The unfinished subway network in the capital city of Tehran needs 2 quadrillion rials ($8.1 billion) of budget for the construction of unfinished lines, purchase of train cars and standardization of equipment, the head of Tehran City Council’s Transportation Commission said.

News ID: ۷۵۰۴۸۷

21 July 2020

Speaking at TCC’s meeting on Sunday, Mohammad Alikhani added that due to the negative effects of US sanctions since the summer of 2018, Iran’s rial is losing value against hard currencies, making it a tough task to expand and renew the ailing public transportation in Tehran, Mehr News Agency reported.

Since the US reimposed sanctions against Iran in 2018, the rial has lost 70% of its value against the greenback over the past year. On Monday, the US dollar was traded at 248,000 rials in Tehran while it hardly fetched 42,000 rials in March 2018.

“A train wagon cost 50 billion rials a couple of years ago, but now the price reaches 200 billion rials, which Tehran Municipality cannot afford at present,” he added.

The TCC official suggested Transit-Oriented Development can be the only way to alleviate current problems related to urban transportation.

TOD is a development model that maximizes the amount of residential, business and leisure space within walking distance of public transport. It promotes a symbiotic relationship between urban density and public transport use.

Alikhani also said managing roadside parking spaces is almost overlooked in Tehran.

“It can be a source of income for the municipality while providing decent parking services to citizens,” he added.

Speaking at the meeting, Mohsen Hashemi, the head of TCC, expressed disquiet over Tehran subway shortfalls and said, “While the subway lines have been extended around the city by 80 kilometers in the past several years, not enough trains have been added to the metro network.”

Hashemi noted that for each kilometer of the subway, there was 1.1 train wagons.

“Today, the figure has fallen by 30%, which means that for each kilometer of operating subway line, there is 0.8 train cars,” he added.

Bankruptcy and Call for Financial Help

Hashemi said lack of budget is the primary impediment in the way of developing public transportation in the metropolis, stressing that the government cannot be blamed, as it is facing intense pressure of US sanctions.

“It’s a pity to witness the bankruptcy of Tehran Wagon Manufacturing Company due to financial problems. The factory has so far supplied over 1,000 train wagons for Tehran subway,” he said.

The TCC chief further said the company’s contribution to subway development is beyond production.

“Half of TWMC’s staff used to regularly oversee train operations. Officials and the government should help save the company to prevent a huge loss both to the staff and the subway system,” he said.

Nevertheless, he asked Tehran Municipality to forge small-scale agreements with TWMC for wagon production.

Hashemi also acknowledged the Oil Ministry’s financial aid to Tehran Metro in April and called on it to help offset the huge revenue loss in the city’s public transportation sector caused by the spread of Covid-19 and further extend the resources.

Two months ago, the ministry invested $15 million in Tehran Metro to help expand the capital’s public transportation network.

Oil Minister Bijan Namdar Zanganeh told reporters that the money was supplied from revenue generated from fuel price rationing scheme that was introduced in November 2019 and would be used to add trains to the network.

The ministry paid 8.3% of the financial assistance to Tehran Metro in mid-February and the remaining 91.6% were delivered in April.

Subway Shortfalls

The challenging task of developing the subway system in Iranian metropolises has raised concerns among urbanists. They blame mismanagement and lack of budget for the slow progress.

In early June, Alikhani had said the capital city’s subway system faces serious shortcomings that will not be obviated even in two decades, if policymaking processes and budget management are not overhauled.

“The subway network still lacks 3,000 train cars to facilitate 10 million daily travels … There are around 1,300 train wagons currently operating in Tehran’s subway, 30% of which need to be upgraded,” he said.

The capital's subway stretches over 220 kilometers and comprises seven lines (1 to 7) with nearly 120 stations. Lines 6 and 7 are yet to become fully operational.

TM expects the number of commuters to surge by 25% after subway lines 6 and 7 are up and running.

But this is definitely not sufficient for Tehran where, according to pre-coronavirus statistics, over 10 million people commute daily, many from the surrounding cities and towns.

However, Tehran is not the only city facing public transportation deficiencies. Reports show Isfahan, the other metropolis in central Iran, is also grappling with the same problems.