Turkmenistan: Big Iran railway deal scrapped

ASHGABAT: Turkmenistan scrapped a $700 million contract for an Iranian company to build a key section of a major new railway line along the eastern shore of the Caspian Sea, state media said on Saturday.

Turkmenistan decided to annul the contract with Iran’s Pars Energy Company, signed in January 2010, at a cabinet meeting chaired by President Gurbanguly Berdymukhamedov, state newspaper Neutral Turkmenistan announced.

Pars Energy had won the $696 million contract to build the Turkmen stretch of the new 900kilometre railway that is to link Kazakhstan with northern Iran through Turkmenistan. This is believed to the first time that Turkmenistan has cancelled a major contract with neighbouring Iran.

Berdymukhamedov was quoted as saying that the Iranian company was not able to carry out the construction “for some economic reasons” but did not give further details. He added that Turkmenistan will now build the Turkmen stretch of the railway itself.

Published in The Express Tribune, September 9^th, 2012.