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EghtesadOnline: Tehran Municipality has signed an agreement with Omid Entrepreneurship Fund to allocate 12.5 trillion rials ($105 million) in cheap loans for the expansion of public transportation system in the capital.

The agreement was signed on Tuesday between Asghar Nourollah-Zadeh, OEF’s director, and Mohsen Pourseyyed-Aqaei, the managing director of TM's Transportation and Traffic Organization, reported.

Diverse solutions for overhauling the aging and inefficient public transportation fleet, including the repair and replacement of dilapidated taxis, minibuses, buses and passenger vans, were discussed at the meeting.

Replacing smog-inducing motorcycles with electric bikes, promoting biking facilities, providing vehicles with pollution absorbents and high quality catalysts converters, and upgrading air quality monitoring equipment and devices were also on the meeting’s agenda, according to Financial Tribune.

Nourollah-Zadeh said the money will be paid to companies active in related fields as low-interest loans to help boost their operations.

"The assistance will both strengthen domestic production units and develop urban transportation services," he added.

Nourollah-Zadeh noted that this is the biggest investment ever undertaken by OEF and will hopefully help achieve the objectives. The OEF's share of the total allocation is 7.5 trillion rials ($63.1 million).

Stressing that the main objective of the agreement is to reduce air pollution in the metropolis, Pourseyyed-Aqaei said the loans will be an opportunity for electric motorcycle makers to facilitate production and create jobs, so this will be a win-win situation.

"If all the organizations and companies concerned join in the move, air pollution and deficiencies of Tehran’s public transportation can become a thing of the past in the next three years," he said.



Previous Measures

According to Peyman Sanandaji, the head of Tehran Bus Company, since the beginning of the current fiscal year (March 21), 100 buses have been repaired.

"The engines of cooling and heating systems have been upgraded," he added.

Additionally, in mid-June, 13 buses and 117 minibuses produced by domestic automakers, such as Iran Khodro, Bahman Khodro and Sabalan Khodro, were added to the public transportation fleet to upgrade the aging transportation network of Tehran.

Tehran Municipality also announced that it has started restoring 500 dilapidated buses that have outlived their usefulness.

“Inefficient public transportation fleet is one of the worst problems afflicting the residents of Tehran. Addressing the issue is high on the municipality’s agenda,” Tehran Mayor Pirouz Hanachi said at the time.

While such positive measures are gaining momentum, they are not effective because of the growing number of dilapidated buses plying the streets of Tehran. 

According to Tehran Bus Company, 6,500 buses are operating in the transportation fleet of Tehran, more than half of which are a wreck. This is while the capital needs at least 9,000 buses to offer decent transportation services to the public.



Bikes Increasing

In a related initiative to promote biking as a cleaner mode of transportation, TM has implemented several measures that have been welcomed by the people.

Nasrollah Abadian, mayor of Tehran’s District 11, told ISNA that 28 new biking stations will be established in the district by August.

"The stations will be installed along Imam Khomeini and Enqelab streets in the central part of Tehran," he said.

The move is a follow-up of an initiative launched about two years ago in Tehran to promote biking. 

To encourage bicycles as a mode of transportation in Tehran, Mashhad and Yazd, a project was launched to set up bike-lending centers and provide bicycles in educational centers and travel zones.

In Tehran, 50 terminals were set up across the city, mostly in crowded downtown areas and near subway stations and tourist sites, to offer a total of 7,000 gearless bicycles. The terminals are still situated at several main city squares, including Tohid, Enqelab and Azadi.

Also, TM launched four bike lanes in the capital's districts 6 and 7, along Taleqani, Karimkhan, Iranshahr and Mofatteh streets.



Economic Headwinds

Considering the economic hardships facing Iran due to the reimposition of US sanctions, the renovation of transportation fleet has become difficult.

Due to the recent economic headwinds, the price of new passenger vehicles and eco-friendly motorcycles has seen a threefold jump, just like any other commodity.

After US President Donald Trump reneged on Iran’s nuclear accord and reimposed sanctions against Tehran last summer, the Iranian rial lost almost 70% of its value over the past year. 

On Wednesday, the US dollar was traded at 118,000 rials in Tehran while it hardly fetched 42,000 rials in March 2018.

Following the reimposition of sanctions, many foreign suppliers of vehicles and parts suspended collaboration with Iranian firms. The country cannot afford to import new buses in large numbers and local manufacturers do not have an adequate volume of parts to boost production.

These factors have derailed schemes for overhauling the transportation fleet. However, with the help of the government and automakers, urban planners are devising solutions to implement these schemes. Only time will show whether these efforts will yield any desired result.


Iran Tehran Cheap Loans municipality Public Transport Public Transportation System Expanding Omid Entrepreneurship Fund