Private sector investors have put up more than 18 trillion rials ($440 million) for the establishment of new towns in Iran during the past four years, said a board member of the New Towns Development Company, affiliated to the Ministry of Roads and Urban Development.
“We also expect to finalize 1 trillion rials worth of investment contracts with domestic investors by the end of the current Iranian year (started March 21),” Mahmoud Mirian was also quoted as saying by the ministry’s official news outlet on Wednesday.
“The development of a new town requires huge amounts of investments, which are beyond the government’s capabilities.”
However, by defining various projects in each new town, the government has managed to attract bigger amounts of funds from the private sector.
According to Mirian, investments in new towns were about 250 billion rials ($6.1 million) in 2013, which amount increased to 7.23 trillion rials ($178.5 million) in 2015 and reached 5.03 trillion rials ($124.1 million) in 2016.
During the year to March 20, 2017, the New Towns Development Company managed to absorb investments in the new cities of Baharestan, Amir Kabir, Pardis, Sahand, Andisheh and Hashtgerd.
Domestic investors have recently started the construction of two new cities in southern Iran, namely Tis New Town located in Mokran Coasts near Chabahar City and Siraf New Town located in Pars Special Economic Zone near Bushehr City.
Once developed, the new towns of Tis and Siraf are expected to accommodate 150,000 and 175,000 residents, respectively.
The establishment of new towns is among the Roads Ministry’s policies to supply more housing units, which will help respond to the rapid expansion of megacities, especially in regions where we can create jobs like Chabahar Port, Asaluyeh in Bushehr Province, Jask and Bandar Abbas in Hormozgan Province.
Mirian noted that last year, the New Towns Development Company signed eight agreements with foreign investors for development of projects in Iranian new towns.
“We have also signed several agreements with foreign entities over transferring know-how and technology, including five agreements with German firms, three with Italian firms, four with companies from Luxemburg and one agreement was exchanged with a Thai firm,” he said.
Foreign companies will invest in a wide variety of fields, including helping with studies on establishing the new town of Khwarazmi, building 300-bed hospitals in the new towns of Golbahar, Parand, Pardis and Hashtgerd, and the design and implementation of subway systems in the new towns of Foolad-Shahr, Sahand and Pardis
NTDC has also held meetings with Chinese investors in recent weeks, Habibollah Taherkhani, the head of the company, said on Wednesday.
“We have also discussed the development suburban rail projects with companies from France, Belgium and Italy,” ILNA quoted Taherkhani as saying.
Last year, Iran’s Ministry of Roads and Urban Development signed a memorandum of understanding with Germany’s Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety to develop the new Hashtgerd Town.
Back in 2015, the company announced that they are getting ready to sign a €900 million agreement with the Korean builder Daelim for building Khwarazmi in a 500-hectare land located 50 km south of Tehran.
The ministry has identified 150 new projects in the 17 new towns that are under construction, including the construction of residential villas and apartments, business, administrative, recreational and industrial services.
The optimal capacity of 17 cities is estimated at 4 million residents while about 800,000 people are living in 17 newly-constructed towns.
Global experience has it that for satellite towns to become attractive for investors, it must have a population of more than 100,000. This is while only seven of the new towns currently have a population of nearly 100,000 people.
These include Andisheh in Alborz Province, Parand in southwest Tehran, Fouldshahr and Baharestan in Isfahan, Sadra in Fars Province, Sahand in East Azarbaijan Province and Alavi in Hormozgan Province.