Iranian MP: China to invest in Khaf-Harat railway project

Iran Materials 16 November 2013 17:57 (UTC +04:00)

Baku, Azerbaijan, Nov. 16

By Rahim Zamanov - Trend:

China plans to invest in Khaf-Harat railway project, Mahmoud Negahban Salami, an Iranian MP, said on Nov. 16.

"The decision was made during the Majlis (Iranian parliament) speaker' visit to Beijing," the IRIB News Agency quoted Negahban Salami as saying.

The construction operation of Khaf-Harat railway was started 8 years ago. Tehran and Kabul are carrying out the project jointly. Some 76 kilometers of the 191-kilometers long railway is on the Iranian side of the border.

"Once the project comes on stream, the two countries can boost transit of goods," Negahban salami added.

It was announced previously that during the Majlis speaker's visit to Beijing, the two sides agreed on Chinese firms' investment in Iranian projects.

National Iranian Oil Refining and Distribution Company's Managing Director Abbas Kazemi confirmed that Chinese companies plan to finance some Iranian petrochemical projects.

Beijing is investing in the projects in order to settle its oil debts to Tehran, the Fars News Agency reported.

China has imported some €18 billion, equalling $22 billion, worth of Iranian oil, but has not paid the money.

Iranian media outlets reported on Nov. 2 that Tehran and Beijing has reached an agreement to unfreeze Iran's oil revenues which are blocked in Chinese banks.

Iranian MP Hossein Sobhaninia told the Tasnim News Agency on Nov. 2 that the Chinese will finance $20 billion worth of Iranian projects in exchange for the blocked money.

The state-owned Iran Newspaper reported on Nov. 2 that $41 billion worth of Iran's oil revenues have been blocked overseas. Tehran had reportedly transferred some $25 billion of assets from European banks to China in a period of time from 2007 to mid-2011 to prevent any possible block. This increases the country's total blocked assets in Chinese banks to $47 billion.

China has agreed to use a portion of the money, which is not possible to be transferred, as collateral and invest triple as much of the money for financing projects in Iran, he explained.

The two sides have also reached agreement to carry out some of the projects on 50-50 basis. In normal situation, international financiers do not accept such a condition.

China is Iran's biggest oil consumer, second goods supplier and first non-oil commodities importer in the world.