Chinese Government provides $672.35 million buyer’s credit loan for Ahvaz Light Rail Line 1 Project

Chinese Government provides $672.35 million buyer’s credit loan for Ahvaz Light Rail Line 1 Project On December 2, 2006, a joint venture between NORINCO and Kayson Inc. signed a $791 million commercial contract for the Ahvaz Light Rail Line 1 Project.

Under the terms of the contract, NORINCO was responsible for the project’s mechanical and electrical engineering requirements (costing $449 million), and Kayson Inc. was responsible for the project’s civil engineering requirements (costing $342 million).

According to China’s Ministry of Commerce (MOFCOM), the Chinese Government agreed to finance 85% of the cost of the commercial contract with a $672.35 million buyer’s credit loan. The lending institution is not known. Nor are the borrowing terms of the loan.

The purpose of the project was to construct a 23 km light rail in the city of Ahvaz (with 24 stops) between Pasdaran blvd. and Golestan blvd.

The duration of the commercial contract was 48 months, and the originally expected project completion date was December 2, 2010. However, as of July 5, 2020, the project had still only achieved a physical completion rate of 30%.

Ahvaz Mayor, Musa Shaeri, also announced the cancellation of the contract with Kayson Inc. due to suspicions that it had not allocated funds where they needed to go. Construction was halted, pending the identification of a new contractor.