Germany's Siemens signed a contract to upgrade Iran's railway network, one of several deals agreed by German firms during a two-day visit to Tehran by Economy Minister Sigmar Gabriel.
Siemens said it will supply components for 50 diesel-electric locomotives to Iran. It did not disclose the value of the contract, but based on comparable deals, it could be in the low hundreds of millions of euros, Reuters reported.
As part of the deal agreed with Iran’s industrial MAPNA Group, Siemens plans to supply components for diesel-electric trains to be developed locally for the country’s state-owned railway system, the company said.
The agreement comes on the heels of a series of contracts signed last March between Siemens and MAPNA to develop Iran’s energy infrastructure, including a license agreement under which MAPNA would acquire the technological know-how to manufacture Siemens F-Class gas turbines. Siemens also has plans to partner with MAPNA to help modernize Iran’s power and electrification system, the firms have said, the Wall Street Journal reported.
Since the lifting of international economics sanctions on Iran in January, German companies moved quickly to rekindle longstanding commercial ties.
In the first six months of this year, German exports to Iran climbed by 15%, to €1.13 billion ($1.27 billion), according to the German Federal Statistical Office. But the figure, compared with total German exports during that period of €603.2 billion, fell far short of expectations.
German business officials who expected the lifting of sanctions would trigger a bonanza for German firms in Iran have blamed the shortfall on remaining US sanctions that complicate financial transactions. While the situation has eased since last year, it is still difficult for many Western companies to receive payments from Iran, experts say.
Accompanying 120 managers, Gabriel flew to Iran where they signed several economic agreements with Iranian companies.
The German Economy Ministry said several firms from the Mittelstand, the small-to-medium-sized companies that form the backbone of the economy, signed deals with Iranian partners. These included SMS group, a builder of steelmaking plants, and INTRA industrial solutions.
In addition, Mitsubishi Germany has signed a contract to modernize a gas-fired plant, while plant constructor Keller HCW wants to build a brickyard in Iran, it said. Both countries' central banks have also agreed to technical cooperation.
Germany, which has commercial and cultural ties with Iran that go back to the 19th century, was for decades a major trading partner of Tehran before the sanctions allowed China and several other nations to overtake it.
