October 14, 2022
In the first major Chinese-funded project in Iran since the two countries signed a 20-year strategic agreement more than a year ago, China is lending Iran around $2.3 billion for a high-speed train project between Qom and Esfahan that some say is a waste of money that will only make Iran more indebted to Beijing.
In an article by economy writer Maryam Shokrani, the Reformist daily Sharq reported July 2 that China had already opened a letter of credit for the project and will complete the payment of the 15-billion-yuan loan by 2024.
Sharq said the loan must be repaid by 2029. With the interest included, Iran will be paying China almost 22 billion yuan, or $3.2 billion.
Sharq said the project has little economic justification, as passenger rail service in the country is a money loser. It said more critical railway projects have been languishing for years.
A former Iranian railway official, Mahmud Heshmati, told Sharq that the Qom-Esfahan high-speed train project has no economic justification whatsoever.
China has long been accused of lending money for questionable projects to foreign countries to tie them more closely to China. The most dramatic case involved a huge port development project in Sri Lanka that the government there was unable to repay on schedule. China now owns the port.