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Iran Freight Transport Report Q4 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: October 2009 Product Code: R302-8567 Description South Korea-based shipbuilder Hanjin Heavy Industries & Construction put three containerships upfor sale in August. This followed a payment dispute with Islamic Republic of Iran Shipping Lines(IRISL), which failed to pay its final instalments of the purchase price of the post-Panamax vessels.Hanjin recently completed the construction of the ships, each of which has a capacity of 6,500 twentyfootequivalent units (TEUs). The ships are worth nearly US$100mn each and were advertised for sale bythe shipbroker ICAP Shipping. However, Hadi Parjand, managing director of IRISL's London office,said the payment dispute had been sorted out and the ships were ready to be delivered. He added that hewas unaware of any other issues that would have encouraged Hanjin to advertise the ships for sale. We forecast 2009 GDP growth in Iran at 1.4% in 2009 (was 2.4%), and are projecting 3.4% in 2010 (was3.8%). Political turmoil in the wake of the disputed June elections, along with Iran’s internationalisolation remain downside risks. The forecast for 2009-2013 is for an annual average GDP growth rate of3.4% per annum. This will still represent a slowing of the pace relative to the average of 5.6% achieved inthe preceding five-year period 2004-2008. The effect on our freight-traffic forecasts for the period as awhole is, therefore, negative comparing the next five years with the preceding five. Despite a questionmark over Indian involvement, agreement on the proposed Iran-Pakistan-India gas pipeline is on thecards, but further delays can be expected and this mega-project will not come on-stream until after theend of our five-year forecast period. Political risk will be a factor hanging over all freight modes. We maintain earlier reductions in thepipeline throughput projection, reflecting the impact of growing domestic demand on exports, andinsufficient new investment. Because of ongoing restrictions on the supply of US spare parts for Iranianownedcivilian aircraft, we think airfreight growth will still be held back by capacity limitations. Shippingtraffic forecasts have been pegged back given the downturn in the global shipping cycle. Taking all thesefactors into account, our forecasts for freight volume across all modes, measured in millions of tonnes,stands at an annual average of 3.3% in the 2009-2013 period, marginally behind of the rate of expansionof the economy as a whole. This suggests the transport sector is a bottleneck for the wider economy. According to our latest estimates, transport and communications GDP rose by 4.9% in 2008 comparedwith general economic growth of 4.7%. For the 2009-2013 forecast period, we expect the transport andcommunications sector to expand marginally faster than GDP, helped along by growth in thecommunications sub-sector. It will achieve average annual growth of 3.5%, versus 3.4% for overall GDP. The total value of transport and communications GDP will rise to US$33.5bn in nominal terms by 2013,representing 6.8% of Iran’s GDP. Projections based on employment figures compiled for the ILO in 1996suggest that Iran’s transport and communications sector employed 3.41mn people, or 20.5% of the labourforce, in 2008. This seems a rather high proportion to us, compared with other countries. Table of Contents
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