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Tehran Municipality Has More Than $13 Billion Debt

The financial problems of Tehran's municipality appear to be worse than previously announced.

The former conservative mayor of Tehran, Mohammad Bagher Ghalibaf, who was ousted after reformists won all the seats at the City Council in last May's elections, had claimed that the municipality owes banks and creditors roughly $5 billion.

The new mayor, Mohammad Ali Najafi announced on September 25, that the real debt is almost $8 billion.

Now, a member of Tehran City Council says that Iran’s capital has close to $14 billion debt and maybe even more.

“I believe that the real debt figure is higher than that,” Mahmoud Mirlohi, a member of the budget commission of Tehran City Council told ILNA News Agency on Saturday and pointed to the fact that this did not include loans that municipality's affiliated companies had taken out.

“Sixty nine percent of municipality's income is from unstable sources,” Mirlohi said and added that fees from land conversions; from agricultural to residential or industrial, were the main source of income for Tehran Municipality.

Unstable sources of income also refers to fees the city administration receives from changing zoning regulations, selling property or issuing building permits, which are not predictable form year to year.

Stable sources of income refer to taxation on property and rental income, etc.

The former mayor Ghalibaf has been sharply criticized by reformists for corruption, nepotism, and mismanagement. Among other things, Ghalibaf had sold tens of thousands of square meters of public lands to his colleagues and allies at a very low price.

Mirlohi, also insists that Tehran Municipality had currently more than 68000 employees. The previous Mayor Ghalibaf and his colleagues had underreported the number of employees by thousands.

Ghalibaf has been also criticized for inappropriate hiring practices. Under his supervision, 4200 relatives of political and military officials as well as famous religious eulogists were hired by a subsidiary of the municipality without following the proper hiring process.

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