By: Maryam Azish. A 2017 report by World Travel and Tourism Council also indicated promising improvements in the country’s tourism industry.

Iran’s tourism industry is considered as the most affordable prices in the world for foreign visitors.

A biannual report published by the World Economic Forum (WEF) gave Iran a score of 66.6 in terms of price competitiveness and put it ahead of global tourism players such as Egypt, Malaysia, Russia, Turkey, Greece, Spain, the US, Franc and Italy.

Overall, the WEF report showed that Iran’s generally travel and tourism competitiveness ranking had improved by four points over the past two years.

A 2017 report by World Travel and Tourism Council also indicated promising improvements in the country’s tourism industry.

As reported by the official website of WTTC, the direct contribution of travel and tourism industry to Iran’s gross domestic production was 367 trillion rials ($9.6 billion) in 2016, constituting 2.9% of the total GDP. The figure is forecast to rise by 7.5% in 2017.

For instance, the development of tourism infrastructure in a target city will not only provide direct jobs in tourist services such as lodging and hospitality, but will also lead to a boom in businesses like handicrafts, food, clothes, transport and many other sectors.

Another important benefit of tourism is the small investment required for entrepreneurship.

In ecotourism, enormous profit can be made with minimum investment since the primary requirements, including an attraction and lodging, are already available.

More importantly, employment in tourism is among the most sustainable since there are always potential consumers for goods and services in the tourism sector.

Job Opportunity

Iran tourism industry generated 559,000 jobs directly in 2016 (2.2% of total employment) and this is forecast to grow by 4.9% in 2017. Previously, it was forecast that tourism would generate 496,000 jobs directly in 2015.

This includes employment by hotels, travel agencies, airlines and other passenger transportation services (excluding commuter services). It also includes, for example, the activities of restaurant and leisure industries directly supported by tourists.

In 2015, about 476,000 jobs were directly created by the travel sector.

By 2027, the industry is predicted to generate 670,000 jobs directly, an annual increase of 1.3% over the next 10 years.

Ali Asghar Mounesan, the head of Iran’s Cultural Heritage, Handicrafts and Tourism Organization, has once again highlighted the role of tourism in job creation in a commentary published in the Persian media.

Pointing to President Hassan Rouhani’s emphasis on tackling the issue of unemployment, the official said tourism industry has great capacities and advantages in this regard, Financial Tribune wrote.

“A major advantage of tourism compared with other industries is that it can generate both direct and indirect jobs, meaning that for each direct job in the sector, several other related secondary jobs are created,” Financial Tribune quoted him as saying.

Mounesan noted that by investing in restoration and refurbishment alone, direct and indirect jobs can be created for tens of local people.

“Ecotourists do not expect luxury facilities of a five-star hotel,” he said.

The amazing shrine of Hilal Ibn Alie

Tourists walk on a platform at a station in Tehran after arriving in the Iranian capital on a luxury train from Budapest on October 27, 2014. (AFP PHOTO/Atta Kenare) 

Visitor Spending

An important part of tourism’s direct contribution to the economy is the money spent by foreign tourists (called visitor exports in the industry). This amounted to $4.2 billion in 2016, up from $1.1 billion in 2015.

The figure is expected to grow by 11.6% in 2017 and continue to grow by 3.4% every year until 2027, when it is predicted to reach $6.6 billion.

Furthermore, Iran’s tourism industry attracted $3.5 billion in capital investment last year, which is expected to rise by 6.3% in 2017 and by 3.4% per year over the next 10 years to $6.2 billion in 2027.

GDP Growth

The industry’s contribution to Iran’s GDP is expected to grow by 7.5% this year, which is faster than the Middle East (4.6%) and world (3.8%) average.

Iran is ranked first regionally with regard to the predicted growth of the sector’s direct contribution to employment (4.9%) this year, more than double the Mideast and global average (both at 2.1%).

Visitor export is also expected to grow by 11.6%, far above the regional (5.2%) and world (4.5%) average.

However, Iran is not expected to fare well in terms of attracting investment compared to other countries, as WTTC predicts a modest 6.3% rise in capital. While this is above the global average (4.1%), it is below the Middle East average (7.3%).

Iran’s declared goal is to attract 20 million tourists every year by 2025, generating $30 billion in revenue. However, if the council’s forecast is anything to go by, achieving that target in eight years is not going to be easy.

Drawing Foreign Tourists

Iran’s ultimate goal is to draw 20 million foreign tourists annually by 2025. However, with only eight years to go, the target appears to be very ambitious.

Iran has set itself a target of 6.5 million inbound tourists in the current Iranian year that ends on March 20, 2018, a senior official at Iran’s Cultural Heritage, Handicrafts and Tourism Organization said.

The objective has been set by the Resistance Economy Headquarters, which also aims to increase domestic tourism numbers to 120 million by the yearend, IRNA reported.

“With proper planning and development of infrastructure, it is possible to meet our goals,” Morteza Rahmani Movahed, deputy for tourism at ICHHTO.

“However, it takes time to heal Iran’s international image,” he added, referring to years of smear campaigns against Iran led by most western media outlets.

At the time being another key point that adds to Iran’s advantage in this industry must be assessed- Iran is the world’s cheapest tourist destination. This fact has been reported by the World Economic Forum (WEF) who has assessed nearly 141 countries.

Statistics show that Iran is currently ranked 15th in terms of tourist attractions in the world. A series of hurdles such as sanctions and propaganda by the west, especially in the media, has prevented Iran’s tourism industry from flourishing.

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Chabahar is the only oceanic port of Iran which lies on 645 km to the south of Zahedan, the provincial capital city.

India regards Chabahar inauguration as gold opportunity to expand regional cooperation

India’s Ministry of External Affairs described the inauguration of Iran’s Chabahar Port project as a golden opportunity for New Delhi to enhance its regional role and cooperation.
In a statement on Sunday, it referred to the visit of the Indian Minister of State for Shipping Pon Radhakrishnan to Iran on the occasion, noting that the ceremony was attended by ministers, ambassadors and senior officials primarily from countries of the region.

According to the statement, Radhakrishnan, during his two day visit on 2-3 December 2017, represented India in the 2nd meeting of the India-Iran-Afghanistan Ministerial-level Trilateral Meeting on Chabahar Port Development and involving the respective Ministers of Iran and Afghanistan. The inaugural Trilateral meeting was held in September 2016 in New Delhi.

It said that “in the Trilateral meeting with Iranian Transport Minister Abbas Akhoundi and the Afghanistan Trade and Commerce Minister Humayoon Rasaw, the three sides reviewed and positively assessed the progress in the development of Chabahar Port and reiterated their commitment to complete and operationalise the Port at the earliest that would contribute to bilateral and regional trade and economic development and also provide alternate access to landlocked Afghanistan to regional and global markets.

It added that the three sides also commended the recent joint efforts which led to the transit of first tranche of 110,000 tonnes of wheat from India to Afghanistan through the Chabahar Port.

The Ministers agreed to further intensify efforts on issues concerning regional connectivity and focusing on Chabahar Port development under the Trilateral Transit and Trade Agreement at the Trilateral Meeting.

The Indian minister expressed his positive appreciation to the Iranian side on the recent steps taken towards ratification by the Majlis of Iran on the Trilateral Transit and Trade Agreement signed in May 2016 between India, Iran and Afghanistan.

The completion of the internal procedures on the ratification process by Iran is expected to lead to full and early operationalisation of the Transit and Trade arrangement between the three countries though the Chabahar Port.

He said it is expected that a trilateral coordination meeting of senior officials will be convened at the earliest.

According to another statement, Sushma Swaraj, the Indian External Affairs Minister visited Iran on December 2, 2017 on her return journey from SCO Summit at Sochi to meet her Iranian counterpart Javad Zarif.

The two foreign ministers discussed the various aspects of India-Iran relations and ways to strengthen it.

They also positively reviewed the initiatives undertaken since the visit of Prime Minister Shri Narendra Modi to Iran in May 2016 including cooperation in Chabahar Port.

Both Ministers also exchanged views on regional and global developments of mutual interest.

The 2nd Ministerial level trilateral meeting between Afghanistan, India and Iran to discuss the implementation of Trilateral Agreement on Establishment of International Transport and Transit Corridor was held at Chabahar on Sunday.

President Hassan Rouhani opened the first phase of Shahid Beheshti Port in the southeastern city of Chabahar on Sunday morning during a ceremony attended by 60 foreign guests from 17 countries at the port located by the Oman Sea.

The port links India to Central Asisa and the Commonwealth of Independent States (CIS).

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Iran says a host of European giants are bidding for the development of its South Azadegan oil field – which was once considered as the world’s biggest oil find after it was discovered over 15 years ago.

Nouroddin Shahnazizadeh, the managing director of the Petroleum Development and Engineering Company of Iran, told the domestic media that the leading European bidders for the project include Total (France), Shell (UK/Hollande), Eni (Italy), Wintershall (Germany), Rosneft (Russia), OMV (Austria) and Maersk (Denmark).

Shahnazizadeh added that several Asian companies including CNPC and Sinopec (China), ONGC (India), Pertamina (Indonesia), Petronas (Malaysia) and PTTP (Thailand) would also participate in a tender over South Azadegan.

The official said officials from the bidding companies had visited Iran for three days to become fully aware about the conditions of the project. Almost a dozen of them, he added, had been even taken to visit the project site.

Nevertheless, Shahnazizadeh did not indicate when the tender over South Azadegan would be held.

Iran has repeatedly postponed the tender over the giant field which it jointly shares with Iraq.

Reuters quoted an unnamed Iranian official as saying in June that the bidding over the project had been delayed by another few months.

This, the unnamed official told Reuters, was meant to allow energy companies more time to study the field.

Iran discovered Azadegan oil field in 1999 in what was the country’s biggest oil find in decades. The country accordingly teamed up with Inpex to push the project toward development. However, the Japanese company later quit the project in what appeared to be the result of US sanctions against Iran.

The NIOC later divided the project into South Azadegan and North Azadegan and both were awarded to China’s CNPC when Iran’s former president Mahmoud Ahmadinejad (2005-2013) was in office.

The media reported in 2014 that Iran’s Oil Minister Bijan Zangeneh had sidelined CNPC from South Azadegan due to its protracted delays in developing the field.

South Azadegan is believed to hold an in-place oil reserve of about 33.2 billion barrels and its recoverable resources estimated at about 5.2 billion barrels.

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Iran signed a multibillion dollar deal on Monday with French oil giant Total and Chinese state oil company CNPC to further develop the country’s giant South Pars Gas Field in cooperation with Iran’s Petropars.

The first major Western energy investment since sanctions against Tehran were lifted will cost up to $5 billion, with production expected to start within 40 months, an Oil Ministry source said, Reuters reported.

The US and other world powers lifted sanctions after the country pledged to roll back its nuclear program.

With the 20-year deal, Total is now returning to Iran, where it first began operating in the 1990s. Total CEO Patrick Pouyanné said in a statement on Monday that the investment would be “in strict compliance with applicable national and international laws”.

The US still has restrictions in place that block most American companies from investing in Iran. And some Western companies have been reluctant to jump in since Iran still faces sanctions that prevent firms from transacting with Iran in US dollars.

Total estimates the first phase of the project will cost around $2 billion. It is taking a 50.1 percent stake in the South Pars project. CNPC will own 30 percent while the other 19.9 percent will go to Petropars.

The project will have a production capacity of two billion cubic feet per day, or 400,000 barrels of oil equivalent per day including condensate, according to Total.

Iran’s Oil Ministry predicts the project will eventually produce gas products worth $54 billion based on current prices. The gas will start flowing into the Iranian market in 2021.

Iran has significantly ramped up its energy production since the sanctions were relaxed.

Figures from OPEC show Iran has boosted its daily crude oil production by more than 33 percent since 2015.

Iran sits on nine percent of the world’s proven oil reserves and 18 percent of the planet’s natural gas, according to data from BP’s Statistical Review of World Energy.

Iran and Qatar share the South Pars field.

Iran has signed a flurry of deals with Western companies over the past year since the easing of international sanctions on Tehran after an accord was reached over its nuclear program.

Iran needs foreign investment to repair and upgrade its oil and gas fields. It also seeks the transfer of technology to its oil industry after a decade of sanctions.

Iran has named 34 companies from over a dozen countries as being eligible to bid for oil and gas projects using the new, less restrictive contract model.

The firms include Shell, France’s Total, Italy’s Eni, Malaysia’s Petronas and Russia’s Gazprom and Lukoil, as well as companies from China, Austria, Japan and other countries.

Russia’s Zarubezhneft signed an MoU to conduct feasibility studies on two joint fields in the west of the country.

Norway‘s International Aker Solutions Company signed an MoU to modernize Iran’s oil industry.

In May 2016, Austria’s OMV signed an MoU for projects in the Zagros area in western Iran and the Fars field in the south.

South Korean Daewoo Engineering and Construction (Daewoo E&C) signed an MoU to construct an oil refinery in Bandar Jask, on the southern coast of Iran.

Italy’s Saipem signed MoUs to cooperate on pipeline projects, upgrading of refineries and development of Tous gas field in the northeastern province of Khorasan Razavi.

Norwegian oil and gas company DNO said it was the second Western energy company after Total to sign a deal with Iran under which it agreed to study the development of the Changuleh oilfield in western Iran.

Lukoil, Russia’s second biggest oil producer, hopes to reach a decision on developing two new oilfields in Iran.

Germany’s Siemens AG signed an MoU in May to overhaul equipment and facilities at Iran’s oil operations and refineries.

BASF’s Wintershall oil and gas exploration subsidiary signed an MoU with the National Iranian Oil Company in April 2016.

President Rouhani:
Developing South Pars Phase 11 not only an economic contract, but also a scientific, technological, management cooperation

President Rouhani met with the Chairman and CEO of France’s Total company and described South Pars region as an important centre for developing international cooperation with Iran in the field of energy-technology.

In the meeting that was held on Monday in Tehran, Dr Rouhani told Total’s Patrick Pouyanné: “Due to the good potentials and hard-working young men in Iran, the contract of developing Phase 11 of South Pars is not only an economic one, but also a scientific, technological and management cooperation”.

Total CEO: We seek a long-term cooperation with Iran

“The Islamic Republic of Iran and France have always had good relations and cooperation with each other,” he continued saying.

Referring to France’s position in economy and energy technology, he added: “The signing and execution of this contract will be a significant step in development of economic and technological cooperation between the two countries”.

Stating that the 11th administration has attempted to finalise the Joint Comprehensive Plan of Action (JCPOA) to clear the path for economic cooperation between major companies and Iran, the President said: “Fortunately, this political will from the Iranian side and among P5+1 countries paved the way for this agreements with Total”.

President also referred to his Europe and France visit after the signing of JCPOA, adding: “In Paris, there was a good political will among the authorities of both countries to develop cooperation and important agreements were signed between the two countries to deepen ties and cooperation”.

“It is our policy to cooperate with major companies such as Total,” said Dr Rouhani, adding: “Currently, projects in gas and oil worth roughly $200bn are ready to be invested on and major foreign companies can cooperate in these projects”.

“We must work hard to achieve peace and stability in the region serving economic progress and development of the region, because scientific and developmental cooperation can help us combat ignorance and poverty as the bedrocks of terrorism expansion,” he continued.

The President also expressed hope that with the new agreements and cooperation in the field of gas, oil and petrochemicals, Iran and France take considerable steps in developing ties.

During the meeting, the Chairman and CEO of France’s Total company Patrick Pouyanné also expressed happiness over meeting the President of the Islamic Republic of Iran and described the contract as a very important one, saying: “Today, we are very happy that we could finalise and execute the contract with the help of the authorities of the two countries”.

Stating that the JCPOA agreement has paved the way for further development of relations between European countries and Iran, he said: “We are optimistic about our cooperation with Iranian companies”.

“We seek a long-term cooperation with Iran,” continued Pouyanné.

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Iranian national football team (also known as Team Melli) qualified for the 2018 World Cup in Russia for the second time in a row.

Team Melli defeated Uzbekistan 2-0 in Tehran’s Azadi Stadium.

The two teams observed one minute of silence as a mark of respect to those who lost their lives in terror attacks in Tehran.

Sardar Azmoun, who was chosen as the Man of the Match, opened the scoring for Carlos Queiroz’s team in the 23rd minute. The Rostov striker has scored 19 goals in 26 matches for Team Melli.

Iran could have scored the second goal in the 48th minute but Masoud Shojaei missed penalty kick.

Mehdi Taremi finished off Uzbekistan in the 88th minute, finding the back of the net from inside the area.

Iran cemented its position at the top of Group A with 20 points.

South Korea is second with 13 points with one game in hands.

Uzbekistan sits third with 12 points.

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The 8th International Tehran Sculpture Symposium is underway at the Iranian capital city’s Milad Tower with the participation of sculptors from Iran and several other countries.
The eighth international sculpture symposium evaluate artworks which have been proposed to the secretariat of the symposium by sculptors from around the world.

Twelve artists selected from 189 applicants from 53 countries along with several Iranian sculptors will compete in the various sections of the event.

Among the competitors are Klaus F. Hunsicker from Germany, Alexey Kanis from Russia, Oscar Aguirre Comendador from Spain, Umit Turgay Durgun form Turkey, Francesca Bernardini from Italy, Valerian Jikia from Georgia, Genti Tavanxhiu from Albania, Ana Maria Negara from Romania, Michael Levchenko from Ukraine, Tatsumi Sakai from Japan, Zdravko Zdravkov from Bulgaria, and Emin Petrosyan from Armenia.

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Iran’s President Hassan Rouhani inaugurated five new phases of the South Pars Gas Field on Sunday which were completed at a cost of $20 billion, local media reported.

The inauguration of phases 17-21 paves the way for Iran to overtake neighboring Qatar in production from the offshore gas field which it shares with Iran, Iranian officials said, reported AFP.

Iran has so far developed 12 phases in the field – phases 1, 2&3, 4&5, 6-8, 9&10, 15&16.  The remaining phases are 11, 12, 13, 14 and 22-24.

“Our production has reached 575 million cubic meters per day,” said Rouhani at the ceremony.

Iran’s total gas production is 885 million cubic meters per day.

It is estimated that production from every two phases of South Pars would generate $3.5-$4 billion for Iran. Reports further said that the total investments in phases that were inaugurated today would be reimbursed within less than two years.

“At the height of sanctions, with the help of Iranian engineers and workers, we succeeded in developing 11 phases of South Pars,” noted Oil Minister Bijan Namadar Zanganeh.

South Pars is the largest known gas reserves in the world. Iran has the largest gas reserves in the world, and the fourth-largest oil reserves.

Each of the new projects produces 28 million cubic meters per day, Zanganeh told reporters late Saturday.

Qatar announced earlier this month that it was ending a 12-year ban on new projects at its section of the shared field. Qataris call their part of the deposit the North Field, which together with South Pars forms the world’s largest reserves of non-associated gas. Iran has no plans to impede Qatar over its activities at North Field, Zanganeh said. “They can carry out their development projects as we do ours,” he said.

 Iranian President Hassan Rouhani inaugurated Phase 19 development project of the South Pars gas field (SP. 19).

Iran is targeting the export of 50 million cubic meters of gas per day to neighboring Iraq once that country can arrange for a letter of credit to finance the purchase, Zanganeh said.

Since the nuclear deal went into effect in January 2016, Iran has increased oil production from 2.6 million barrels per day (mbd) to 3.9 mbd, while more than doubling its oil exports.

Iran has signed a flurry of deals with Western companies over the past year since the easing of international sanctions on Tehran after an accord was reached over its nuclear program.

Iran needs foreign investment for repairs and upgrading of its oil and gas fields. It also seeks the transfer of technology to its oil industry after a decade of sanctions.

In November 2016, France’s Total became the first oil major to sign a big deal with Tehran since the lifting of sanctions and agreed to help it develop the world’s largest gas field, South Pars.

Shell signed a provisional deal in December to develop Iranian oil and gas fields of South Azadegan, Yadavaran and Kish.

Iran has named 29 companies from more than a dozen countries as being eligible to bid for oil and gas projects using the new, less restrictive contract model.

The firms include Shell, France’s Total, Italy’s Eni, Malaysia’s Petronas and Russia’s Gazprom and Lukoil, as well as companies from China, Austria, Japan and other countries.

Russia’s Zarubezhneft signed an MoU for a feasibility study on two joint fields in the west of the country.

Norway’s International Aker Solutions Company signed an MoU to modernize Iran’s oil industry.

Last May, Austria’s OMV signed an MoU for projects in the Zagros area in western Iran and the Fars field in the south.

South Korean Daewoo Engineering and Construction (Daewoo E&C) signed an MoU to construct an oil refinery in Bandar Jask, on the southern coast of Iran.

Italy’s Saipem signed MoUs to cooperate on pipeline projects, upgrading of refineries and development of Tous gas field in the northeastern province of Khorasan Razavi.

Norwegian oil and gas company DNO said it was the second Western energy company after Total to sign a deal with Iran under which it agreed to study the development of the Changuleh oilfield in western Iran.

Lukoil, Russia’s second biggest oil producer, hopes to reach a decision on developing two new oilfields in Iran.

Germany’s Siemens AG signed an MoU in May to overhaul equipment and facilities at Iran’s oil operations and refineries.

BASF’s Wintershall oil and gas exploration subsidiary signed an MoU with the National Iranian Oil Company in April 2016.

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Nowruz holidays provide a good opportunity to the tourists willing to see historic monuments of Tehran.

Nowruz inscribed in UNESCO list

The multinational case of Nowruz, the traditional Iranian festival of spring, has been inscribed in UNESCO list of Intangible Cultural Heritage on Wednesday 30 November 2016.

This morning, in the third day of the 11th session of the Intergovernmental Committee for the Safeguarding of the Intangible Cultural Heritage that has been underway in Addis Ababa, Ethiopia, from 28 Nov. to 2 Dec., the multinational case of Nowruz was finally inscribed in the List of Intangible Cultural Heritage of the United Nations Educational, Scientific and Cultural Organization (UNESCO).

Following the inscription, Mohammad Hassan Talebian, Iran’s deputy head of Cultural Heritage, began his address by reciting a poem by the great fourteenth century Iranian poet Hafiz, adding “Nowruz is the manifestation of wisdom, moderation, and hope for life.”

Iranian Ambassador to UNESCO Ahmad Jalali who headed the Iranian delegation at the global conference on the Intangible Cultural Heritage, delivered a lecture on the significance of Nowruz and its message.

Representatives of Kazakhstan and India hailed Iran’s leadership in the Nowruz case that included participation of 14 other countries.

Nowruz celebration is observed by Iran, Albania, Afghanistan, Azerbaijan, China (by Turkic peoples and Tajiks), Georgia, India (by Parsis), Iraq (by Kurds and Turkmens), Kazakhstan, Kyrgyzstan, Pakistan, Russia, Syria (by Kurds), Tajikistan, Turkey, Turkmenistan and Uzbekistan.

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International port and shipping sector is looking to Iran as one of the most interesting growth opportunities in years and volume growth is imminent.

The January 2016 lifting of the nuclear-related sanctions provided a boost to Iran’s economy, but for the recovery to be sustained, longstanding structural reforms are required.

Container and bulk volumes above and beyond pre-sanction levels are probable if global political developments turn out in Iran’s favor. However, port infrastructure in Iran has not seen upgrades for many years and with the cascading of larger vessels on to regional trades, significant investment is clearly essential.

Risk perception of Iran has reduced in the global investment community, although recent developments associated with the Trump administration may have significant influence on the overall investment climate in Iran.

For now, however, it appears that Western investors are holding their horses, ready to move if local and global political developments turn out favorably.

Nevertheless, the government is looking at increasing foreign involvement to facilitate growth and bring state-of-the-art operational knowledge and expertise.

In Iran’s current national five-year development plan, Makran Port is noted as a top regional greenfield development in the port sector. Iranian authorities plan to open up this project to foreign investors in order to attract sponsorship for a project that combines an industrial park, petrochemical facility plant, transit cargo and a bunkering facility.

An advantage of establishing the industrial park within the proposed free trade zone is its proximity to available energy resources. Reportedly, the Iranian authorities are expected to offer an interesting investment climate with attractive incentives such as the possibility to invest jointly with an Iranian partner or independently. Tax exemption, sovereign guarantees and free repatriation of capital and profit will also likely be included.

Iran is also ideally located to play an ever more important role for transit cargos. Through the Caspian Sea, it has access to Russia, Kazakhstan, Turkmenistan and Azerbaijan, as well as the adjacent countries. It also neighbors Iraq, Turkey, Armenia, Pakistan and Afghanistan.

Currently, the majority of the transit cargo is routed through Shahid Rajaei Port. This provides access to a North-South Transit Corridor, connecting to the former Soviet Republics and offering a competitive alternative to the Black Sea route via Georgia.

Chabahar investment

The East transit corridor provides access to Afghanistan and Central Asia through the Chabahar-Milak Corridor. Here, Chabahar port is open for significant investment, collectively amounting to $565 million.

The port is located on the southernmost tip of Iran on the Gulf of Oman. It lies near the border of the Indian Ocean and the Sea of Oman and is currently the only Iranian port with direct access to the ocean.

Located 72km west of Pakistan’s Gwadar Port, Chabahar holds immense strategic and economic significance for India, which has committed to $150 million of finance and a build-operate-transfer scheme worth $85 million through government-backed India Ports Global Private Ltd. Once completed, the port would enable India to send its goods from Chabahar to Central Asia and Afghanistan in particular, without passing through Pakistan.

Chabahar is also crucial for landlocked Afghanistan, as the deal also includes a north-south railroad that could help Afghanistan exploit its untapped mineral wealth and reduce its reliance on foreign aid.

The project will also lessen Iran’s vulnerability to possible disruptions in the Strait of Hormuz.

If the Strait, which is a shipping bottleneck at the mouth of Persian Gulf, were to be blocked due to regional hostilities, Chabahar would be the single point connecting Iran to high seas.

Amirabad promise

Iran’s other investment opportunity is at Amirabad Port — a port on the Caspian coast. It includes a rail-ferry terminal on the North-South Corridor and is a major grain handling facility.

It is currently the largest port facility in north Iran and the third-largest port in the country. Plans include a modern rail ferry terminal, a ro-ro facility and increased grain handling facilities to boost the volumes from 7½ million tons to 18 million tons by 2030.

To achieve this, the grain silo capacity will be enlarged from 170,000 tons to 500,000 tons. Further, its oil storage capacity will be expanded from 16,000 cubic meters to 70,000 cubic meters in order to support fuel transit activities.

Another major cargo flow is anticipated for container and vehicle transit with the member countries of the Commonwealth of Independent States (CIS).

During the sanctions, container volumes dropped by 30 percent and are currently 2.5 million TEU.

Looking at overall container volumes, 86 percent are transported through Shahid Rajaei Port in Hormuzgan Province, with smaller volumes through Bushehr, Iman Khomeini and Khorramshahr ports. All four ports have room and desire to grow above and beyond the pre-sanction volumes.

Maersk, MSC, CMA-CGM, UASC, HMM, Messina, PIL, Wan Hai and Evergreen are all now back in Iran, post sanctions.

The majority of services are either feeder services via Jebel Ali/Salalah or short-sea between the Far and Middle East.

In the meantime, vessels have increased in size and are set to increase further in 2017 with new alliance services.

Natural resources

There is significant potential to grow still further, and it is expected that 10,000 TEU ships will become a regular sight in Iran later this year.

Increased traffic compared with previous years is already being observed. As an example, Maersk recently added a call at Bushehr with a 3,300 TEU vessel via Jebel Ali.

While there are undoubtedly a lot of uncertainties that can potentially influence further volume growth, economic expansion is expected to drive onboard container volumes to pre-sanction levels relatively quickly, despite these uncertainties.

Apart from the oil and gas industry, Iran’s mineral reserves were valued at more than $770 billion in 2014.

Although the oil industry provides the majority of economic revenues, roughly 75 percent of all mining sector employees work in mines that produce minerals other than oil and natural gas.

Iran’s mineral reserves include coal, iron ore, copper, lead, zinc, chromium, barite, salt, gypsum, molybdenum, strontium, silica, uranium and gold.

The mines at Sarcheshmeh in Kerman Province contain the world’s second-largest lode of copper ore at five percent of the world’s total. Further, large iron ore deposits exist in central Iran, near Bafq, Yazd and Kerman.

As such, it is expected that the mining sector could eventually contribute to more than a third of Iran’s non-oil and gas exports.

Policy moves

The dependence of the government’s future on economic growth suggests that the efforts to implement investor related reforms are genuine.

Foreign investment is required to reinvigorate the economy. Iran’s economy is marked by internal market activity and significant agricultural, industrial and service sectors and reliance on oil and gas exports.

Recent reforms have increased the positive outlook, but there are also structural issues that weigh down the economy, undermining the potential for private-sector-led growth.

There is a general positive expectation towards economic improvement and greater international engagement. This could all lead to the reintegration of the Iranian economy on the global platform.

Due to the lifting of the sanctions and a more business-oriented environment, real GDP growth is projected to reach 4.8 percent in 2017.

Strong capital inflows, including FDI and the repatriation of part of the frozen assets, could put upward pressure on the Iranian rial which will help contain imported inflation.

Iran’s current account position is expected to turn into a surplus in 2017, also primarily driven by rising oil exports.

The government’s five-year development plan covering 2017–2021 aims for an annual growth rate of eight percent and a reform agenda built on a gradual but sustained transformation of the economy.

The plan envisages the implementation of reforms of state-owned enterprises, the financial and banking emphasis on the allocation and management of oil revenues to productive investments. None of this can happen without a significant level of investment in a modernized port sector.

Container volumes are on the rise, containerization is increasing and pre-sanction levels are on the horizon.

Whether or not Iranian ports will be able to capitalize on that potential will largely depend on global and local political developments.

All the right ingredients are there and the world is anxiously watching. Iran could very well be the shipping world’s next rough diamond.

*Roy van Eijsden is a senior director at WSP Parsons Brinckerhoff and looks after the global Maritime Advisory and Transaction Services portfolio.

By Roy van Eijsde, This article originally appeared in portstrategy.com.

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The first South Korean ship will be delivered to Iran in March 2018 based on a deal to buy 10 Ultra Large Container Vessels (ULCV) from the Asian state, announced the managing director of the Islamic Republic of Iran Shipping Lines (IRISL).

Mohammad Saeedi added it is a 14,500 TEU container ship built by South Korea’s Hyundai Heavy Industries Co. (HHI), Tasnim News Agency reported.

He said after receiving the first ship, the remaining ships will be handed over to the IRISL at monthly intervals.

The IRISL signed the deal with the HHI to buy 10 ships from the world’s largest shipbuilding company in December. Financed by South Korean banks, the contract was inked between representatives of the IRISL and the HHI on December 9, 2016.

Under the contract, valued at $650 million, Hyundai will build 14,500 TEU container ships and 50,000 DWT product tankers.

The contracts were parts of the IRISL’s plans to renovate its fleet at a total investment of $2.5 billion.

The company operates about 115 oceangoing vessels, but many of the ships are old and have been deemed unsafe to travel and cannot be insured.

The agreement marks Iran’s first deal with a foreign shipbuilder since the removal of anti-Tehran sanctions.

The sanctions were lifted after Tehran and the P5+1 (Russia, China, the US, Britain, France, and Germany) finalized a lasting nuclear deal on July 14, 2015 and started implementing it on January 16, 2016.

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