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Italian companies sign deals worth €16-17 billion with Iran

by Celestina Dominelli

Italian companies bagged rich deals during Iranian President Hassan Rouhani’s visit to Rome yesterday.

The Italian government and Tehran signed, through their respective ministers, a number of agreements that mark the beginning of a process of close cooperation between the two countries.

As a result, a number of agreements were also signed with very positive prospects for Italian businesses: from oil services group Saipem to shipmaker Fincantieri, which will be involved in the revival of the Iranian shipbuilding industry as well as in the mercantile and offshore fields; from Ansaldo Energia and Condotte; to Gavio and Pessina Costruzioni, which was picked to build and manage five “turnkey” hospital facilities in project financing.

While other companies, such as state controlled oil group ENI, future deals will be linked to any developments on the contracts it is working on with the Tehran government. According to reports, Eni CEO Claudio Descalzi had a face to face meeting with the Minister oil Bijan Namdar Zanganeh.

But let's proceed one by one.

Saipem signed two memorandums of understanding with Iran's National Gas Company and Persian Oil & Gas Company to start discussions on the possible cooperation from the company led by Stefano Cao for the modernization work and upgrading of refineries Pars Shiraz and Tabriz.

Italy's export credit company SACE signed an agreement to collect €564 million of sovereign credit claimed by the subsidiary of Italian state -backed lender Cassa Depositi e Prestiti against the Central Bank of Iran.

Under the agreement signed by the Chief Executive of SACE, Alessandro Castellano, and the Iranian governor, Valiollah Seif, the payment to the company will take place in three installments by October 15 2016. The credit consists of compensation paid in previous years by SACE to Italian companies for financing unpaid by Iranian counterparts following the blocking of payment systems imposed by international sanctions.

State owned railway company Ferrovie dello Stato will also be at the forefront in Iran after the agreements signed yesterday.

Leading the way yesterday was a memorandum of understanding signed by Italian Transport Minister Graziano Delrio and his Iranian counterpart Abbas Akhoundi, which calls for the return of Ferrovie dello Stato to the country where it has been active since 2001, with the holding company and Italferr (engineering company) and Italcertifer (certification) subsidiaries. The contracts are worth up to €5 billion.

Italferr has been selected for the project of the high-speed railway Tehran-Qom-Isfahan and is following the electrification of the Tehran-Mashhad tract, while Italcertifer is working on the preliminary design of the test center of the Iranian railways.

The Danieli Group took home substantial contracts, worth approximately €5.7 billion, signed by the chairman of the group, Gianpietro Benedetti. The agreements are related to a joint venture called Persian Metallic, which will involve a group of international investors and that is worth €2 billion, as well as orders for the supply of plants and machinery to produce steel and aluminum that will be installed in the Iranian territory.

The end of sanctions in Iran will finally open new opportunities for the Gavio group and Itinera, the subsidiary active in construction which signed two agreements (also in the form of a memorandum of understanding) with two of the most important construction companies in Iran as part of the transport infrastructure in the country, particularly in the railway sector. The value of these contracts is sizable and, according to industry sources, reaches nearly €4 billion.