Mon, Apr 09, 2007
Advanced Search
PDF Edition
Domestic Economy
Economic Focus
Dot Coms
Global Energy
World Politics
International Economy
Arts & Culture
70% of Population Own Homes
DoE to Monitor Underground
Water Pollution
Stage Set for Wheat Export
Oil Market Oversupplied
Steel Output Will
Exceed 13m Tons
Supporting Farmers Essential for Development
US Critical of Iran-Turkey Ties
GAZ Delivers 500 Minibuses

70% of Population Own Homes
Minister of housing and urban development said on Sunday that 70 percent of the population have their own homes.
Speaking at a meeting of Khorasan Razavi Administrative Council in Mashhad on Sunday, Mohammad Saeedikia said that everybody in this country wishes to have a house of his/her own while close to 70 percent of global population live in rented units.
The minister added that 7-8 percent of the people live in housing units provided by the government, Econews reported. About 20 percent of housing units are rented, he noted.
The ministry, Saeedikia said, is trying to increase transactions in built-up areas rather than lands. He stated that a comprehensive housing plan is also being drawn up under which those in need of housing are to be provided with homes rather than land.
He cited housing regulations based on which each mass-constructors who build more than 200 housing units are obliged to build a school in the vicinity.
Recalling the key role played by municipalities in solving urban housing problems, Saeedikia pledged that should the mayors decide to undertake housing constructions in municipality-owned lands, the ministry will provide them assistance.
“The ministry will assist the municipalities by paying construction costs of 20 residential units and a 140-million-rial subsidy per unit.“
Elaborating on the ministry’s responsibilities, Saeedikia stressed that his ministry is neither a constructor nor a seller of housing units. “It only has a mandate to supervise the construction, renting and sale of residential units.“
Although urban real estate market is a powerful in Iran in terms of absorbing investment, housing has posed a dilemma for the low-income stratum since around 70 percent of people’s income is spent on rent, purchase and saving for house.

DoE to Monitor Underground
Water Pollution
A plan to examine pollution level of country’s underground water reserves will begin in late May, managing director of Department of Environment’s Office for Studying Water and Soil Pollution announced.
Soroush Modabberi elaborated that under the plan, the level of pollution in two major groundwater resources in each province will be measured.
Recalling that basic scientific information on water and soil condition in the country is not available, the official regretted that it is not clear how much of the water and soil resources are polluted.
“Although some information is obtained about pollution of surface water, no data is available about the pollution of groundwater sources.“
He said that each resident unit or factory can be a source of pollution.
The plan, Modabberi stated, would help the top environmental body to collect data about the level and type of pollution of underground water to find solutions for eliminating them.
The official noted that 40 billion rials is required for the scheme which will run through May 2008.
He criticized the Parliament for objecting to the special credit considered in the new Budget Law for the scheme.
Modabberi added that the required funds will be secured from budgets allocated to other DoE plans.
“Preliminary surveys suggest that groundwater resources in Karaj, Mashhad and Tehran plains are contaminated with nitrate.“
Iran ranks 24 in the world in terms of access to safe water and 95 percent of the Iranians have access to clean water. Water resources of the country have become polluted due to industrial activities, which have inflicted irreparable damages to Lake Orumieh, Lake Hamoun and several wetlands.

Stage Set for Wheat Export
Iran needs to add 10 million tons to its current wheat storage capacity over the next three years.
Iran will export two million tons of wheat by March 2008, a turn-around for a nation that once imported the basic commodity, reported PressTV.
Mohammad Sadeq Mofatteh, the deputy commerce minister for domestic trade told reporters in Tehran Sunday that the ministry will extend financial facilities to Iranian wheat exporters.
“The Ministry of Agriculture Jihad has predicted a considerable increase in the country’s wheat output this year due to appropriate climatic conditions,“ he said, adding that the Commerce Ministry plans to help the private sector play a more active role in wheat trade.
Mofatteh said that private firms have already built wheat silos with a total storage capacity of over one million tons, adding that more silos are under construction across the country.
“We expect the national wheat storage capacity to rise by 2.5 million tons by March 2008,“ he said, adding that wheat storage capacity stood at four million tons last year.
Mofatteh stated that the latest estimates of United Nations Food and Agriculture Organization suggest that Iran needs to add 10 million tons to its current wheat storage capacity over the next three years.
Until a few years ago, Iran was one of the world’s top importers of wheat but the country managed to significantly boost its wheat production by allocating large tracts of land to wheat cultivation, which was formerly used for other crops.

Oil Market Oversupplied
Iran’s OPEC Governor Hossein Kazempour Ardebili said on Sunday that the oil market is oversupplied but recent high prices are not related to low or restricted supplies.
Speaking to reporters, the official linked recent price hike to geopolitical concerns (over British-Iranian row), closing of some refineries for seasonal maintenance and a sharp decline in stocks of gasoline, IRNA reported.
Recalling that member states of the Organization of Petroleum Exporting Countries emphasized on close observance of the quota in their March meeting in Vienna, he stated that a commitment to cut output by 1.7 million bpd was agreed by the hydrocarbon-rich countries.
“The measure has helped decrease crude inventory in oil consuming countries (OECD member-states) by 90-100 million barrels from the earlier 120-150 million barrels.“
In other words, a decline in the said stocks achieved through quota observance by OPEC producers will prevent future crude price fall.
Kazempour Ardebili predicted that prices will remain stable in the coming months due to increase in gasoline consumption by US drivers as well as enforcement of the recently-adopted environmentally-friendly regulations in California.
Stressing that group’s next meeting will be in September, the official noted that the member-states can call an emergency gathering in the wake of any unexpected price fluctuations.
Reiterating that crude prices will be firm in 2007, he forecast that a lot of excess volume will be out there in the years to come.
“The OPEC surplus output will be between five and six million barrels y 2012.“
Crude prices leapt to nearly $70 per barrel last week, mainly as a result of tension over the capture of British sailors by Iran.
They were trading at about $68 per barrel in London and $64 in New York on Thursday, with traders weighing the end of the British-Iranian standoff against news of a sharp drop in stocks of gasoline in the United States.
The recent high prices were due to geopolitical situation and had nothing to do with supply.

Steel Output Will
Exceed 13m Tons
The Fourth Five-year Development Plan calls for steel production of 28 million tons.
Timely supply of steel bars promises the production of over 13 million tons of steel products.
Expressing this, head of Iran’s Steel Manufacturers Association, Taqi Bahrami-Noshahr told MNA on Sunday that in the last Iranian year (ended March 20), 11.2 million tons of steel products were manufactured, of which the government’s share was 9.2 million tons while some two million tons was supplied by the private sector.
Bahrami added that this year, the government has the potential of producing 1.8 million tons of iron beams if bars are provided on time.
The government will be fully supplied following the establishment of five major iron-beam projects including Sahand-e Sabalan Iron Beam Factory in the northeastern province of Ardebil.
Each of the projects has an annual production capacity of 500,000 tons.
Adding that the private sector has contributed by producing 2.15 million tons of iron bars and angle irons, Bahrami said that the import and supply of raw materials will enable the private sector to increase its production capacity to five million tons.
Pointing to several meetings held with officials of the Ministry of Commerce as well as the Ministry of Industries and Mines and those involved in importing steel bars, head of the Steel Manufacturers Association said although tariffs on raw materials and trade have been eliminated, ’this has not yet materialized’.
The Fourth Five-year Development Plan calls for steel production of 28 million tons, he continued and urged the government and President Ahmadinejad to pay special attention to the steel industry.
Failure to supply the raw material to factories will oblige producers to operate only at 25 percent of their actual capacity.
This is uneconomical and will be detrimental to the national economy, he concluded.

Supporting Farmers Essential for Development
President Mahmoud Ahmadinejad has stated that support for farmers is the road to development. Speaking to the ministers of agriculture jihad and commerce as well as officials in charge of cash purchase of wheat, the chief executive underlined the role key role of the agriculture sector in country’s progress.
Ahmadinejad called on those involved in purchase of the staple to execute such plans for other crops too.
“The move would, among other things, encourage villagers to improve their agricultural activities, give farmers hope, augment motivation in the farmers, not to mention the development of rural areas.“
The plan to purchase wheat from producers of the strategic food in cash is carried out in the country after a long hiatus. Commerce and agriculture jihad ministries as well as Mellat Bank are obliged to implement the scheme.
Stressing that the scheme can serve as a model for other agri sector, the president stated that it helps control waste, check consumption and ’is a step toward targeting subsidies for special groups’.
Economic experts and parliamentarians keep calling on the government to make subsidies targeted to curb excessive consumption.
Iran has one of the world’s highest rates for wheat, power and fuel consumption.
Turning to quality of bread in the country, Ahmadinejad noted that mechanized and efficient baking methods should be used to slash bread wastage.
Despite the high value of bread in Iranian culture, proper attention has not been paid to consumption patterns. About 30 percent of bread is wasted. Subsidies to the tune of some 30,000 billion rials are also allocated to bread production but this needs revision.

US Critical of Iran-Turkey Ties
The United States has expressed concern about and objection to Turkey’s plans to establish a strategic alliance with Iran in the field of energy, according to Turkish Daily News.
“We’re watching the situation with concern,“ said a US diplomat from the American Embassy in Ankara.
Turkey and Iran have agreed to build a long-term cooperation in the energy sector, namely drilling oil and natural gas, construction of three natural gas run power plants and the transfer of Iranian oil and gas to Europe.
Considered as a ’drastic shift’ in its energy policy, however, this new step by is considered as vitally important by Turkey in order for it to become a global player as well as a local hub in the energy market.
Cooperation with Iran in all of these energy areas will be undertaken through joint ventures. In lengthy discussions, Turkey proposed an equal footing joint venture based on drilling new oil and gas wells as well as their transport to Europe through Turkey.
Iran, with the second largest natural gas reserves in the world, thus will be able to deliver necessary resources to Europe. Turkey plans to become a trade partner in energy, not just a transit point collecting transfer fees.
The Iranian side welcomed the offer, which was discussed during Iranian Foreign Minister Manouchehr Mottaki’s February visit. Turkey will acquire the right to operate Iranian natural gas reserves if an agreement is reached. Turkey has already pledged $2 billion for the sole purpose of marketing and operating Iranian natural gas.
The European Union, which is seeking to diversify its energy sources and thereby reduce its dependence on Russia, would prefer to purchase Iranian gas, told sources familiar with the issue to the Turkish Daily News. No new pipeline needs to be constructed since a natural gas pipeline already exists from the Iranian border though to Greece.
The agreement between Ankara and Tehran also includes the construction of three natural gas power plants in Iran, which will produce 2,000MW of electricity each. One-third of the 6,000MW total energy output is intended for domestic use and the rest will be traded.
Iran previously offered providing one billion kW/h for a year to Turkey for 3.5 cents per kW/h. Union for the Coordination of Transmission of Electricity’s (UCTE) standards must be met before the transfer of energy.
This task will be completed by the end of this year.
Oil will constitute the third pillar of cooperation.
Construction of a refinery, oil exploration and marketing of Iranian oil through Ceyhan are included in the partnership package. The transfer will be carried out through Batman-Yumurtal line, an operation that requires further investment on pipelines. Iranian oil will reach world markets from Ceyhan energy terminal with oil tankers.
However, the Turkish governmental plans with Iranians drew criticisms from the United States. A US diplomat, on the condition of anonymity, told the TDN that they are watching the situation with concern. “It is US policy to oppose any investment by a third-party country in Iran, including the energy sector,“ underlined the diplomat.

GAZ Delivers 500 Minibuses
Russia’s Gorky automobile plant, GAZ, has delivered 500 of its Gazel minibuses which were purchased by Iran earlier to Iran Khodro Diesel Company.
According to Itar-Tass, a total of 28,000 minivans will be supplied to Iran over three years under a contract worth $200 million signed between GAZ and Iran Khodro Diesel last October.
Some 10,000 of the vehicles are to be supplied this year, said Oleg Markov, director of GAZ’s Russian Cars trading house.
The minibuses have standard furnishing and their engines meet the Euro 2 environmental standard.
Markov said that the ZMS-405 engines make the minibuses particularly suitable for Iran’s climate, especially in areas prone to tropical sandstorms.
Both sides say they hope to build an assembly line for the Gazel minivans in Iran sometime in the future.
Under the current agreement, 27 service centers will also be established in different parts of Iran within two years. Earlier this year, Iranian technicians participated in a training course at the GAZ facilities in Nizhny Novgorod to prepare for the service centers.