LONDON (Reuters) - Iran’s state rail company and its Italian counterpart signed a final agreement worth 1.2 billion euros ($1.37 billion) on Tuesday to build a high-speed railway between the cities of Qom and Arak, the Fars news agency reported.
The agreement was signed in a ceremony in Tehran attended by Saeed Mohammadzadeh, head of the Islamic Republic of Iran Railways, and Renato Mazzoncini, CEO of Italy’s state rail company Ferrovie dello Stato (FS).
A framework of “cooperation agreement” was signed in April 2016, when former Italian Prime Minister Matteo Renzi visited Tehran seeking a strong foothold in a nation hungry for infrastructure investment as it emerges from financial isolation.
Iran rejoined the global trading system in 2016 after a deal with world powers to lift crippling sanctions in exchange for limiting its nuclear activities.
Tehran has announced plans to invest $25 billion over the next 10 years in the modernization and expansion of its railway network.
“One percent of oil and gas sales has been dedicated to rail development in Iran’s sixth development plan,” Mohammadzadeh was quoted as saying by Fars.
Iran is seeking to expand its rail network to 25,000 km (15,500 miles) from 10,000 km currently, with 7,500 km already under construction.
Reporting by Bozorgmehr Sharafedin; Editing by Louise Heavens and David Goodman