Iran has cancelled a US$2bn contract with China to build a Bakhtiari hydro-electric dam and handed the project over to its Revolutionary Guards. The Iranian Central Bank has rejected the financial package proposed by the Chinese, and the energy ministry has decided to attribute the deal to Khatam al-Anbiya, the industrial branch of the Guards. Iran and China had signed a deal in March 2011.
The project was for a 1,500 MW electricity plant and dam called Bakhtiari in southwestern Iran. Bakhtiari would be a 315 meter-high arched dam on Bakhtiari River within the Zagros Mountains. The dam will have the reservoir capacity equivalent to 4.8 bcm and would include a 1,500 MW hydropower plant. Construction is expected to last 10 years.
Iran has already scrapped several big projects with China. In October last year, it suspended a US$15bn deal with the China National Petroleum Corporation to develop the major North Pars gas field in the Gulf, saying the Chinese were not investing sufficiently quickly. Western experts in Tehran estimate Chinese companies have so far injected less than 10% of the US$50bn they have promised over the past five years to invest in various Iranian projects, most of them in the oil and gas sector.
Many contracts abandoned by Western firms have been attributed to Khatam al-Anbiya, which accounts for most of Iran's major infrastructure development, such as the building of roads, bridges, dams, ports and pipelines.
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