TEHRAN - In the past two decades, Iran’s transportation infrastructure has gone through a major transformation, and every year the country is advancing more in this area.

Currently, more than 80 percent of the country’s roads are paved and the government is also hugely planning on expanding and developing the country’s railway network especially in border areas since the country has numerous neighbors with which it has close trade ties.

In this regard, the budget allocated to the Transport and Urban Development Ministry is increased every year to support the development of the mentioned sector at a fast pace.

In the government administration’s draft of the national budget bill for the next Iranian calendar year 1400, which starts on March 21, 2021, 140 trillion rials (over $3.3 billion) has been proposed to be allocated to the Transport and Urban Development Ministry and its affiliated organizations and companies, about 12 percent more than the allocation in the current year.

The budget allocated to the Transport Ministry in the current fiscal year was 123 trillion rials (about $2.93 billion), 25 percent more than the budget allocation for the preceding year of 1398 (ended on March 19).

Among the transport ministry’s affiliated bodies, the Construction and Development of Transportation Infrastructures Company (CDTIC) has the largest share from the mentioned budget, with about 78 trillion rials (about $1.85 billion), followed by Iran Road Maintenance and Transportation Organization with 24.04 trillion rials (about $572.3 million).

Also, the Islamic Republic of Iran Railways, known as RAI, is going to receive about 21.28 trillion rials (about $506 million), and after that, the Transport Ministry’s Central Headquarters is in fourth place with more than 14.33 trillion rials (about $341 million).

A look at the proposed budget allocation of the ministry under review indicates that the budget for all the ministry’s subsidiaries has increased except for Iran Airports Company whose proposed budget for next year has been reduced by 16.67 percent compared to this year.

Based on the mentioned allocations, it is clear that the government is going to be more focused on the priority projects in the roads and railway sector, while the aviation, maritime and maintenance come in second place.

The mentioned approach was not unexpected, since as mentioned earlier, the development of the main roads to link the country’s strategic economic areas as well as the expansion of the railway network have been two of the Transport Ministry’s major goals in the past few years. 

Because, nowadays, expanded transportation via railway is one of the major pillars of sustainable development for all countries and the governments usually allocate noticeable funds and resources to the development of the railway.

Iran’s Sixth Five-Year National Development Plan (2016-2021) has envisaged that the railway will account for at least 30 percent of cargo transportation and 20 percent of passenger transportation in Iran.

However, considering the recent monetary issues in the country and the financial restrictions created by the decline of oil prices, the coronavirus pandemic, and the U.S. sanctions, the increase in the next year’s budget for the Transport Ministry has not been that significant compared to the current year’s budget.

Iran’s Deputy Transport Minister for Resource Planning and Management Amir Mahmoud Ghaffari had previously said that the county needs over 1.8 quadrillion rials (about $42.8 billion) of financial resources for completing transportation infrastructure projects underway across the country.

Clearly, allocation of the mentioned funding would not be possible in the current situation, so there is a long way ahead for the Transport Ministry to achieve its goals for developing the country’s transportation infrastructure.

However, for supporting the Transport Ministry’s infrastructure projects and the modernization of the transport fleet, the country’s Transport Development Fund has been established which is going to fund some of the projects in the mentioned sector.

Also, the recent developments in the White House and the election of Biden as the United States’ new president has increased the chance of the U.S. coming back to the 2015 nuclear deal and easing some of the sanctions on the Islamic Republic. In that case, more resources would become available to be allocated for transportation projects.

EF/MA