This month’s edition of Iran Strategic Focus has an in-depth report focused around Iran’s construction sector. Our experts go into detail around the three main sector participants in Iranian construction: semi-state, governmental and private. Dissecting them at each level and looking at the leading companies, corporations and conglomerates, their risks, corruption and pros and cons.

Interested in business with Iran’s Construction Sector or just want a copy of this month’s Iran Strategic Focus? Then please either email Menas Associates or call us on this number +44 (0)20 3585 1401.

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Post-sanctions economic development will generate diverse opportunities in the Iranian construction sector. The government will have to invest in needed infrastructure, and developing the petroleum, power generation, and other industries will necessitate major construction projects.

Foreign investors who wish to develop business in the sector will need to understand the risk of sanctions or reputational damage that key players might bring.

One key factor to be aware of is the prevalence of corruption. Most of it is related to the acquisition and development of land – particularly corruption allegedly perpetuated by governmental and semi-state institutions. Other forms of corruption include manipulation of legal land ise, violations of tender formalities, and greater sales of buildings than legally allowed.

Categorising sector Participants

As is true of other sectors, the construction industry can be categorised by three types of participant : semi-state, governmental, and private.

The semi-state sector includes companies that are controlled by powerful state institutions such as the Islamic Revolutionary Guard Corps (IRGC), the police, and bonyads, or revolutionary foundations. There organisations have a very complex structure, and most of them have their own real estate development companies.

Their construction capabilities have declined, however, due to managerial and financial problems.

Governmental enterprises are dominated by organisations such as the Ministry of Roads and Urban Development, Bank Maskan (Housing Bank), the municipalities, pension funds, and so forth.

The private sector includes entities such as investment companies, private banks, and construction contractors – including some foreign companies.

Interestingly, semi-state institutions and private-sector enterprises are heavily involved in both the ownership/development of lands and the construction of business. To that effect, they have created their own financial institutions – banks, credit and finance agencies, and investment companies – as well as their own construction companies.

This clearly distinguishes them from governmental organisations, which are involved for the most part in the implementation of infrastructure investment plans approved by the government.

The list of key players below identifies their potential sanctions or reputational risks for international companies and banks. A more thorough analysis companies and banks. A more thorough analysis would be required if engagement is contemplated.

To read the full document then please contact our Iran consultancy team to get your copy.