Public Transport Overhaul to Start

EghtesadOnline: The scheme to streamline Iran’s public transportation will be launched soon, based on a deal to overhaul age-old buses and taxis in metropolises, a deputy interior minister said.

News ID: ۷۸۵۹۸۷

14 February 2021

During a press conference held in Tehran on Friday, Mehdi Jamalinejad added that the deal for overhauling 5,000 buses was signed by Plan and Budget Organization, mayors of 68 cities and Omid Entrepreneurship Fund in November 2020, IRNA reported.

“In the first step, Iran Khodro [IKCO] has agreed to overhaul 3,000 buses and supply spare parts for the transportation sector,” he said.

As per the deal, OEF will pay cheap loans worth 2.24 billion rials ($8,500) to each owner of a dilapidated bus with a 4% interest rate and a repayment period of five years.

The remaining expenses are to be covered by municipalities and owners. Further details are expected to be announced later.

“Municipalities can also receive fiscal aid from a total of 900 billion rials [$3.4 million] specified for the restoration of public transportation in the 2019-20 budget bill,” Jamalinejad said.

Hamid Pour-Mohammadi, a PBO deputy, said that of the total number of buses covered by the scheme, 1,700 will be revamped from the capital city of Tehran and Isfahan, 1,600 from Karaj, Ahvaz and Kermanshah, and the rest from other cities.

“The restoration scheme is to improve public transportation services in metropolises, increase employment rate in the sector, improve ventilation systems that benefit passengers, especially during the Covid-19 outbreak, help curb the suffocating air pollution, increase the efficiency of fuel consumption and boost transportation safety,” he added.

Renovation of 8,000 Taxis

At the conference, Mehdi Jamalinejad also announced that 8,000 cabs have been renovated since the beginning of the current Iranian year (March 2020) and 2,000 more will be overhauled by March.

Last summer, IKCO and Iran Taxi Union signed a deal to upgrade 10,000 urban taxi fleet over a yearlong period, in a push to reduce fuel consumption and combat air pollution in the metropolises.

IKCO's Sales Manager Alireza Oskouei said at the time that the number of new vehicles earmarked for renovating the fleet can increase, depending on demand and drivers' inclination to participate in the renovation scheme.

Reportedly, the scheme’s executors agreed with local banks to offer low-interest loans to cabbies, in order to speedily implement the plan.

According to officials, loans worth 400 million rials ($1,500) were to be offered to drivers of old taxis to encourage them to let go of their dilapidated cars.

Morteza Zameni, the head of ITU, told reporters that the union is negotiating with IKCO to overhaul another 40,000 cabs nationwide in the next year.

Similar Project

In another move, IKCO and ITU are jointly pushing an initiative to replace 50,000 dilapidated taxis with CNG-hybrids by the end of the current Iranian year (March 20).

The initiative is aimed at curbing the worrying air pollution in Iranian metropolises while reducing gasoline consumption.

Zameni said the scheme features two IKCO sedan models, namely Samand EF7 and Peugeot 405, which is underway in four cities: Tehran, Mashhad, Hamedan and Isfahan.

“The whole renewal process will take less than a month. Owners of dilapidated taxis file an application with Iran taxi Union. After identity verification, drivers are required to make a down payment. The invoice and license plate number of the new vehicle are issued and the applicants are asked to complete their payments based on the price of the selected car model,” he said.

Zameni noted that new cars will be ready for delivery 48 hours after the drivers dispatch their old vehicles to the scrapyard.

Announcing that over 2,200 taxi drivers have so far submitted applications, the official said that to help the cabbies, municipalities of the targeted cities will pay them loans worth 500 million rials ($1,890).

“The loan covers close to half of the new vehicle’s price. Samand costs 1.15 billion rials [$4,360] and Peugeot 405 is sold for 1 billion rials [$3,800]. The scheme was approved by the Cabinet’s Economic Council in early March 2020,” he said.

However, the implementation of the plan was postponed because the government, which is opting for Euro 5 standard cars, banned the issuance of license plate numbers for Euro 4 vehicles due to their low quality and high pollution.

As the two models earmarked for the renewal scheme are Euro 4 vehicles, ITU started negotiations with state authorities to carve out exceptions for the plan.

A brand-new Euro 4 vehicle was way cleaner than a decade-old car, they argued.

“Finally, the Cabinet agreed with the delivery of 5,000 Euro 4 vehicles by Oct. 21, 2020, and new decisions will be made for the remaining 45,000 vehicles,” Zameni said.

“Iran has about 150,000 dilapidated taxis that are worsening air pollution, which figure constitutes nearly half of the 360,000 vehicles in the taxi fleet.”

The ITU chief had earlier announced that the number of old cabs will reach 245,000 by 2021, if effective measures are not taken.