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Iran Economy Update
Issue 43/2017 THURSDAY APRIL 6TH
KIA Motors
Tasnim news gives speculation on reasons for import ban on KIA Motors On the reasons for the prohibition of the importation of KIA motors, the president of the Iranian car importers association told Tasnim news on Wednesday afternoon that
“as far as I know, Atlas Khodro had acquired the representative office of KIA motors in Iran but this company may have failed to receive the confirmation of the ISIRI and the Environment Protection Organization.” In another report, Tasnim wrote a few hours later on the same day that the certification of the representative office of KIA Motors in Iran expired on 30 November 2016 and was not further extended.
“According to the new regulations of the ministry of Industry, Mine & Trade, only the companies whose representative offices in Iran have been registered are allowed to sell their products in Iran,” wrote Tasnim.
Yadollah Sadeghi, caretaker of the ministry of Industry’s economic & commercial directorate has declined to make comment on any specific foreign product that has recently been prohibited from being imported but said “if the name of a brand is not seen on the website of the Secretariat of High Council of Supervising the Guilds1, we will investigate the case.” He said the representative offices of foreign products should first be registered at this directorate to acquire permission for imports.
Iran-India
Petroleum minister says is not concerned about India’s oil cut threat
1 This secretariat is affiliate with the ministry f Industry, Mine & Trade (http://iranianasnaf.ir)
Petroleum Minister Bijan Zangeneh said he is not worried about India’s threat to reduce oil purchase from the Islamic Republic.
Reuters wrote New Delhi’s threat is aimed at putting pressure on Tehran to award developing the field to an Indian consortium.
Bijan Zangeneh however told reports on Wednesday that “we are willing to develop our relations with Indians but if they reduce their [oil] purchase, will face no trouble because we have other buyers.” “Today, demand for Iran’s crude oil is higher than our export capacity,” added the minister according to Mehr news. He explained that in his negotiations with the Indian Prime Minister, President Rouhani had given this country time until last September to start talks on Farzad B and despite our further extension of this deadline until the end of 2016, they didn’t submit any acceptable proposal. The minister said that we are making arrangements so as other countries are able to come along [to negotiate developing the field]. “We have also sent a letter, as the last letter, to India and stated that we are ready to conduct talks but under reasonable conditions and not under threats,” he added.
Since Farzad, an Iranian gas field with estimated in-place reserves of 18.75 trillion cubic feet, is shared with the neighbors, its development is of high priority for the Islamic Republic. The gas produced from the field is slated to be used as feedstock for LNG projects or for petrochemical plants.
An Indian news source had said on March 9 that Indian ONGC Videsh Ltd has finalized an over $3 billion development plan for Farzad-B gas field and is likely to wrap up a deal by September 2017. One month earlier on February 5, NIOC Managing Director Ali Kardor had said that technical talks are
2 finished but financial terms are yet to be cleared. Kardor said if we fail to reach agreement, we may split the project into smaller packages and implement each one with an EPFC (Engineering, Procurement, Fabrication and Construction) approach.
Labor Law
Labor ministry to withdraw Labor law reform bill from Majles
With about one month left before the presidential elections in Iran in which Rouhani seeks reelection, informed sources have told Mehr news that the minister of Labor, Cooperative & Social Welfare is going to ask President Rouhani to withdraw the controversial bill on reforming Labor Law from the parliament.
The Rouhani government on July 2nd had submitted a bill on reforming the Labor Law to the Majles, which led to the widespread criticism among labor activists and labor supporters who argued it serves the interest of employers, allows mass layoffs, and transfers the right of laying off of workers from the Islamic Labor Councils to employers. Also, various Labor Association syndicates in different Iranian industrial sectors issued statements, terming it an
“anti-worker” law that is “doomed to fail” and called for an “immediate suspension” of approving the bill by the parliament.
Representatives of the Iranian society of workers believe that the bill has been drafted without taking their opinions and concerns into considerations.
An informed source has told Mehr news that minister of Labor, Cooperative, & Social Welfare will soon issue a letter to the president and ask him to withdraw the bill from the parliament and send it back to the government’s social commission for further studies and review.
The daily Shargh wrote that the Labor Law which was approved and endorsed 26 years ago covers a population of 13 million workers which if being multiplied by the
number of family members, will give a population of 50 million.
Iran-China
Visiting Chinese industry delegation was offered financing four projects in Iran An Iranian delegation visited China in the first days of spring to finalize negotiations on building two high-speed rail lines of Tehran-to-Isfahan and Tehran-to-Mashhad, the daily Donyay-e Eghtesad wrote on Thursday. This issue was pursued and discussed on Wednesday as part of the schedule of agenda of a 50-strong delegation from the China Federation of Industrial Economics. The agreement for building the two rail lines on finance are estimated to be finalized in a month, according to Donyay-e Eghtesad, and the projects are expected to be carried out in four years and the projects’ payback period is 10 year.
Donyay-e Eghtesad wrote that the visiting delegation is pursuing two objectives: (1) establishing relations with Iranian industrialists and (2) laying the groundwork for investment. Asadollah Asgaroladi, chairman of the Iran-China Joint Commerce Chamber told Donyay-e Eghtesad that four projects on road building, mining, machinery and car manufacturing have been proposed to the Chinese for investment during this visit.
According to Donyay-e Eghtesad, the Chinese delegation is led by the vice executive director of the China Federation of Industrial Economics, and includes the managing director of the Beijing Automotive Group as well as the managing director of the China Logistic Company.
