New Towns Will Undo Old Problems

EghtesadOnline: Twelve “new towns” have been planned in 10 provinces with the aim, among other things, of developing urban living areas and creating much-needed jobs.

News ID: ۷۸۳۸۳۸

29 August 2018

Financial Tribune’s sister publication, Donya-e-Eqtesad, recently published a special supplement on New Towns Development Company, affiliated to the Ministry of Roads and Urban Development.

The supplement looks into the problems facing new towns and how they are addressed by the company’s board, relevant authorities and ministry officials.

Proposal and plans for the next generation of new towns have been outlined by urban planners, civil engineers and experts.

History of New Towns

The concept of next-generation towns, which define decent and pleasant dwelling places, has long been floated in Iran, which are said to be far different from similar places that emerged in the past.

Facing monumental challenges, namely population explosion, large numbers of people displaced by the brutal 1980-88 Iraq-Iran war and the alarming rate of rural to urban migration, governments initiated housing construction projects on an industrial scale in the 1980s. The new places that emerged came to be known as new towns.

The 30-year roadmap is still underway, as more and more people hunt for affordable housing in or near big cities.

Mehr Housing project launched in 2007 infused billions of dollars into building homes for those at the lower end of the economic ladder. The plan was to provide people, mostly youth, with affordable housing.

About 2.2 million housing units were to be built, with 401,000 in the new towns. Reports say 246,000 units in the new towns have been delivered so far.

An estimated 765,000 people live in 17 new towns across the country, which are mostly located near cities of notable size, namely Tehran, Isfahan and Tabriz, and the main religious city Mashhad.

The largest population, 116,000, in a new town is in Andisheh, southwest of Tehran.

However, despite the non-stop efforts of successive governments and urban planners, people living in the new towns hardly make up 3% of the country’s total population, which is a far cry from the 15% estimated in the master plan.

The new towns have not been able to attract the big numbers originally projected because of a whole gamut of understandable reasons. The new generation of towns now being built is aimed at overcoming the many shortcomings seen in the design, location, amenities and facilities of the existing new towns.

Difficulties in Existing New Towns

According to Habibollah Taherkhani, deputy minister of roads and urban development, the inability of new towns to achieve their population projections is due to two main reasons.

One reason was that the then government refused to accept the responsibility of creating the necessary infrastructure. For instance, proper public transportation is among the critical needs of new towns across the world, but when the housing projects were launched in Iran, it simply was not a priority for the government. The focus then was “build, build, build” and everything else would come afterwards!

“The other reason is that urban policies in big cities were not compatible with the needs of new towns. All big cities have undergone expansion over the years. This (expansion) was not supposed to be the case because the new towns were being built,” Taherkhani said.

Mahmoud Rahimi, a member of the board of directors of New Towns Development Company, said the new towns built in the past were mostly seen as dormitories, meaning there is no sense of community among the inhabitants largely due to topological inefficiency and the inability of these towns to attract businesses.

Vision Plan

The next generation of towns will focus on achieving proportionate growth in infrastructure, superstructure and utilities, says Zohreh Davoudpour, another member of the NTDC board.

The towns will have a different topography compared to the existing ones because they will not be built in close proximity to big cities but rather in coastal areas in southern Iran.

Of the 12 new towns planned, only one is located in Tehran Province.

What is strongly stressed is that the next-generation towns will be safe, eco-friendly and smart, providing opportunities for startup businesses. If the vision for the new towns is realized, they will be self-reliant and inculcate a strong sense of community among its residents, something that is conspicuous by its absence in the existing new towns.

Funding for the new projects will be different from the old ones in that the authorities are considering issuing sukuk (Islamic bonds) for securing funds from the private sector rather than begging for money from the government(s) that are almost always in the red and struggling with budget deficits.

“Additionally, BOT (build-operate-transfer) contracts are being considered for some of the projects in the next-gen towns. Projects that can create a reasonable profit in the foreseeable future can be passed on to investors as BOTs, like those for building hotels, hospitals and malls, based on feasibility studies,” says Sadeq Akbari, another NTDC board member.

Of the 12 towns to be built, five will be in the provinces bordering the Persian Gulf and the Sea of Oman with the purpose of promoting and supporting accommodation, tourism and trade.

Four are located in the central provinces, aimed at providing accommodation as well as tourism and logistic services; one is in the northern province of Mazandaran near the Caspian Sea, which will also be a tourism attraction and the last will be in the western province of Kurdestan.

The next towns will be resident-oriented, with the government functioning only as the overseer and the private sector will be in charge of all things related to services, amenities and maintenance.