Iranian flag-carrier IranAir has signed a $300mn public-private partnership agreement with Imam Khomeini Airport City (IKAC) to build a multimodal cargo terminal and logistics centre in the airport's southern aviation free zone, the country's Ministry of Roads and Urban Development announced on May 21, IntelliNews has learned.

Imam Khomeini Airport, located 25 kilometres south of Tehran, is undergoing a $2.8bn expansion. The ambition is to one day make it a Middle East/Central Asia airport hub that can compete with Persian Gulf hubs. When ultimately completed, its new terminals aim to handle 20mn passengers per annum.

This deal, one of the most significant air freight infrastructure commitments to date at IKAC, falls under the current Persian calendar year's slogan, "Investment for Production", and aligns with goals of Iran's Seventh Development Plan. It also comes as the current administration aims to push ahead with delayed development projects for the main air terminal, due to US sanctions stymying development. 

According to the provided information, the logistics hub will be constructed in the core logistics zone of the airport's free trade area and is designed to be one of the most advanced in the country. It is expected to substantially increase Iran's freight capacity and boost transit through international air corridors.

The new Terminal will also relieve pressure on existing infrastructure at the airport, which has struggled with exports in recent years due to the volume of exports.

"This project is a turning point," said Akbar Hosseini, head of investment at IKAC, calling it "a major step" towards making IKAC a regional freight hub and linking central Iran to the global supply chain.

The private sector will finance the entire investment. Construction will proceed in four phases, with operations starting in 2028 at 50% capacity. The centre is expected to create around 850 direct jobs, alongside hundreds more indirectly, the airport said.

Announcement follows a $270mn agreement signed in April for the country's largest cargo terminal, also at IKAC, to ease long-standing bottlenecks and reinforce Tehran's role in regional trade logistics.

Earlier in 2017, the Iranian government also announced new free trade zone rules for jewellers looking to set up operations around the airport.  The centre is expected to increase exports of gold and jewellery products, create sustainable employment for thousands in the precious stone cutting and processing industry and develop commercial tourism.

Akbar Hosseini, Director General of the Investment and Resource Mobilisation Office of Imam Khomeini Airport City, announced in 2018 the signing of the investment contract for the project, which comes after two years of negotiations and technical-economic model evaluations.

The Airport expansion was planned more than two decades ago, but sanctions and financial restrictions effectively mothballed development. The pace of progress has increased in recent years with the second terminal, named Salam, which is designated for flights on the annual Hajj. 

Earlier, the original master plan for IKAC included the creation of a 1,500-hectare free trade zone and a 2,500-hectare special economic zone within a 13,700-hectare area surrounding the site.

The airport has faced several setbacks in recent years. French airport development firm Bouygues pulled out last summer, apparently due to financial and political issues. But Iran’s Deputy Minister of Roads and Urban Development Asghar Fakhrieh-Kashan dismissed that claim, Iran Labour News Agency reported. “Cancellation of the agreement was by no means related to banking restrictions,” he reportedly said at the time.

The minister said the Iranians cancelled the deal in spring because the French firm failed to keep up with the schedule.

Bouygues was meant to work with local company NACO, Iranians speaking with IntelliNews in 2018 said, NACO neglected to communicate with the Dutch. “NACO immediately held a tender [to replace the French company] and dozens of international companies participated. We will soon choose a qualified company,” Fakhrieh-Kashan said.