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EghtesadOnline: A preliminary deal signed by French construction firm Bouygues last year to build and run a new terminal at Tehran’s Imam Khomeini Airport has been canceled, a spokesman for the French construction group said on Friday.

The memorandum of understanding awarding Bouygues the contract was agreed in January 2016 during the visit of President Hassan Rouhani to the French capital.

Although the online newspaper La Lettre de l’Expansion reported that the project was hindered by the company’s struggle to get financial backing from international banks, Iran’s deputy minister of roads and urban development, Asghar Fakhrieh-Kashan, has dismissed the claim, ILNA reported.

“Cancelation of the agreement is by no means related to banking restrictions,” Financial Tribune quoted him as saying.

According to Fakhrieh-Kashan, the deal was canceled three months ago by the Iranian side because Bouygues failed to fulfill its obligations on time.

The French firm was supposed to work with the Netherlands’ Airport Consultants, which is engaged in consulting on aspects of constructions.

The deputy minister noted that Bouygues failed to provide Naco with plans and reports as scheduled.

“NACO immediately held a tender [to replace the French company], in which dozens of international companies participated. We will soon choose a qualified company,” he said.

Developing the area surrounding Imam Khomeini International Airport to create an airport city has been on the Ministry of Roads and Urban Development’s agenda since 2011. The government-owned IKIA Airport City Company was established in 2015 to manage the project’s execution and supervision over investment activities.

Through this entity, the government negotiated a joint-venture with Bouygues and French airports operator Aeroports de Paris to build a new passenger terminal in a deal worth $2.8 billion that would increase airport capacity to 20 million passengers per annum in the first phase.

“The MoU is now void but there are still ongoing discussions with Iranian authorities,” the Bouygues spokesman was quoted as saying by Reuters.

Aeroports de Paris also said in February it would no longer take part in the project.

The master plan for IKIA airport city includes creating a 1,500-hectare free trade zone and a 2,500-hectare special economic zone in a 13,700-hectare area surrounding IKIA.

The plan also aims to establish 25 commercial facilities encompassing a wide range of commercial activities, including manufacturing, telecommunications and logistics, hotels, retail outlets, entertainment complexes and exhibition centers, on a 400-hectare area in the vicinity of the airport.

Iran airports Bouygues Iran-Bouygues IKIA