China North Industries Corp (NORINCO), the state-run industrial and trade conglomerate, has won a mammoth metro line project in Iran with strong backing from Chinese financial institutions.

According to the deal clinched on Saturday in Teheran, NORINCO will build the 19.04-kilometer metro line in the city with Teheran Urban & Suburban Co.

The deal, worth US$836 million, is China's largest overseas engineer, purchase and construction contract, NORINCO told China Daily.

NORINCO beat a slew of strong foreign bidders for the project, such as Germany's Siemens, Daelim Industrial Co Ltd - a consortium jointly controlled by South Korea's Daewoo, LG and Hyundai - and the Industrial Development and Renovation Organization of Iran.

It will be NORINCO's second metro project in Iran, which China is becoming increasingly dependent on for oil and gas.

From 1996 to 1999, the Chinese conglomerate built its first metro link in which was also the first for the Islamic nation. NORINCO and the Teheran firm have formed a joint venture (JV) to manufacture rolling stock for the metro project.

The US$12-million JV, in which NORINCO has a 49 percent stake, will make rolling stock, engines and spare parts in China, NORINCO said.

China will export US$527 million worth of machinery and electronic equipment to Iran for the project, the company said.

The Export & Import Bank of China will provide loans for the undertaking. China Export Credit Insurance Corp will handle insurance.

NORINCO, established in 1980, now has 82 overseas branches.

Its turnover exceeded 20 billion yuan (US$2.4 billion) last year.

(China Daily May 17, 2004)