Accessibility links

Breaking News

Iran Lawmaker Criticizes Failed $100 Million Auto Plant Investment in Senegal

FILE - Iran Khodro car factory in Tehran. Corruption and inefficiency have plagued Iran's auto industry.

A member of the Iranian parliament says the Iranian car manufacturer, Iran Khodro, has invested $100 million in Senegal, without producing any vehicles or making any gains.

"Iran Khodro is still paying the expenses related to its Senegal investment. Therefore, it adds the expenses on the price of its vehicles manufactured in Iran for the local market," Amir Khojasteh told the Islamic Revolution Guards Corps (IRGC)-run Fars news agency, adding, "That is why the price of home-made vehicles is soaring."

During the hardline Mahmoud Ahmadinejad's presidency in 2006, the Senegalese government announced that it had agreed to manufacture Iranian Samand sedans in the country by an Iranian-Senegalese company.

Iran Khodro owned 60% of the shares of the new joint venture. However, immediately after the construction of the car factory, it was revealed that the Senegalese electricity grid could not provide the power needed for the plant. As expected, the whole project collapsed.

Khojasteh also revealed that another Iranian car manufacturer, SAIPA, has $3.8 billion of losses and owes $2.8 billion to the banks.

"The government owes $50 million to SAIPA, but the car manufacturer cannot collect it," Khojasteh said, concluding, "SAIPA's losses are much more than its capital."

Moreover, according to the city of Hamadan's MP, SAIPA owes nearly $4.8 billion to spare parts manufacturers.

There have been many recent reports about wide-spread corruption in Iran's state-controlled auto industry, with many senior managers arrested or under investigation.

Majles, the Islamic Republic's parliament, has launched a probe and appointed an investigative board to look into the performance of the Industrial Development and Renovation Organization of Iran (IDRO), which Iran Khodro and SAIPA are listed as its subsidiaries.

Ironically, a member of the parliamentary board, Mohammad Azizi was arrested along with the city of Zanjan's MP on August 21, for "disrupting the vehicles market." He was later released on a $2.3 million bail.