Iran Cancels $2 billion Dam Deal With China

Iran Cancels $2B Dam Deal With China
30 May 2012 - Dow Jones Chinese Financial Wire

LONDON (Dow Jones)--Tehran has cancelled a $2 billion contract with
China to build a giant hydro-electric dam, an Iranian official said
Tuesday, a setback for Iran's strategy to deepen ties with the Asian
nation amid mounting sanctions.

The official was confirming Iranian media reports that said Iran's
central bank had rejected the financial terms offered by China's
Sinohydro Corp, which couldn't be reached for comment.

Instead, Iran gave the contract to Khatam al-Anbiya, which is controlled
by the Iranian Revolutionary Guard Corps, Energy Minister Majid Namjou
was quoted as saying by the semi-official news agency.

The project is for a 1,500-megawatt electricity plant and dam called
Bakhtiari in southwestern Iran, which Iran has described is the largest
of its kind in the country.

Iran has bet on China to break its increasing isolation in the wake of
deadlocked nuclear talks with the West. The move includes bartering
Iranian oil--for which Beijing has become the largest buyer--for
infrastructure projects using China's currency, the Yuan. However, Iran
has signaled it wouldn't offer discounts on the value of its oil and has
also frequently complained that Chinese investors weren't moving fast
enough.

Reporting on the cancellation of the dam contract, Iranian reformist
newspaper Etemaad blamed "obstructionism and delays" by Chinese
companies and said it had turned them into "most unreliable foreign
contractors in Iran."

In October, Iran had already suspended a $15 billion deal with the China
National Petroleum Corp. to develop the major North Pars gas field in
the Gulf, following years of delays.

Western experts in Tehran estimate Chinese companies have so far
injected less than 10% of the $50 billion they have promised over the
past five years to invest in various Iranian projects, most of them in
the oil and gas sector.

However, the vacuum left by foreign companies has been filled by the
regime's tight-knit inner circle.

Parviz Fattah, director general of IRGC Cooperatives Foundation which
oversees some of the Guards' businesses, officially asked President
Mahmoud Ahmadinejad to transfer the dam contract to Khatam al-Anbiya,
according to daily Etemaad.

The Guards' Khatam al-Anbiya has been awarded contracts worth more than
$25 billion in Iran's oil and gas sector, according to a figure given
last year by deputy oil minister Ahmad Qalebani.

***

Iranian press highlights 29 May 12
29 May 2012
BBC Monitoring Middle East

The following is a selection of highlights from the Iranian national
press on 29 May

E'TEMAD

1. Unattributed report: "With the transfer of the greatest Iranian dam
to Khatam ol-Anbiya [IRGC Construction Base]: The exit of the
almond-eyes from Iran." The daily reports that Parviz Fattah, director
general of IRGC Cooperatives Foundation, and former energy minister, has
officially asked President Ahmadinezhad to transfer the Bakhtiari Dam
contract - the greatest of its kind - to IRGC's Khatam ol-Anbiya
Construction Base. The daily says that such transfers "have become
routine these days," and that they come as consequence of the Chinese'
"obstructionism and delays" that had turned them to "most unreliable
foreign contractors in Iran." The report lists and explains the state of
progress of various Iranian projects, in which the Chinese are or have
been involved. These include North Pars Gas Field, Phase 11 of South
Pars Gas Field, Yadavaran and Azadegan oil fields, Iran LNG, Kermanshah
Anahita Refinery, Esfahan Refinery, Resalat Oil Field, Garmsar Oil and
Gas Exploration Bloc, Setareh-ye Khalij-e Fars (Persian Gulf Star) Oil
Refinery. (p 1; 2,763 words)

Sources: Iranian press highlights, in Persian, 29 May 12
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