EghtesadOnline: Tehran Mayor Mohammad Ali Najafi said the municipality owes over 300 trillion rials ($7.69 billion), mostly to banks and contractors.
“The outstanding debt is 1.7 times more than the municipality’s total budget for the current fiscal year (March 2017-18),” he was quoted as saying on the Ministry of Roads and Urban Development’s website.
Najafi put TM’s budget for this year at 179 trillion rials ($4.58 billion), twice its outlay for the year ending March 2012.
“But in inflation-adjusted terms, this budget is 20% smaller than what it was six years ago, when we take into account the purchasing power,” Financial Tribune quoted him as saying.
“Out of 90 trillion rials ($2.3 billion) projected for the TM budget for the first half of the current year (March 21-Sept. 22, 2017), only 67 trillion rials ($1.7 billion) or 72% have been allocated,”
The mayor added that to complete Tehran’s infrastructural projects, TM needs 225 trillion rials ($5.76 billion), which is more than the city’s annual budget and definitely manifold bigger than the budget allocated to development projects.
Noting that Tehran needs to tap into private sector potential and foreign investments, Najafi said, “Some 72% of the projects in Tehran need further funding even after they are completed. The municipality’s local resources are unlikely to be adequate to conduct and complete these projects. Therefore, we are thinking of establishing a so-called city development fund.”