(MENAFN - AzerNews) By
The Islamic Republic of Iran Railways signed a contract with OJSC Export Insurance Agency of Russia for financing a joint project for manufacturing rail transportation related equipment.
The deal, worth 3 billion euros, was signed by Saeed Mohammadzadeh, head of Iran Railways, and Pyotr Fradkov, chairman of Export Insurance Agency, in Tehran on December18, the Iranian state-run IRINN TV reported.
Under the contract, the two sides agreed to make joint investment within a five-year period for manufacturing passenger and freight rail cars as well as locomotives and other equipment by Iranian and Russian firms in Iran.
The first phase of the contract covers joint manufacture of 6,000 freight cars through funding from the Russian side.
Wagon Pars, Kowsar Wagon Company and Derakhshan Arak Steel are Russian United Wagon company's counterparts in the Islamic Republic which will take part in the project.
Iran's transport sector has remained underdeveloped due to mismanagement as well as international sanctions.
A May 2016 report said the major Iranian wagon maker, Pars Wagon was operating at 25 percent of its capacity because of scanty liquidity with railway companies and too few orders from customers.