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Tehran Municipality $8 Billion In The Red


New Mayor of Tehran, Mohammad Ali Najafi, undated

The outstanding debt of Tehran Municipality is 1.7 times more than the the organizations's total budget for the fiscal year, Tehran Mayor Mohammad Ali Najafi said on September 25.

Tehran Municipality is more than 300 trillion rials (roughly $8 billion) in the red. The creditors are mainly banks and contractors.

Najafi put the municipality's budget for the current year at 179 trillion rials, twice its outlay for the Iranian fiscal year ending March 2012.

However, the former head of Tehran City Council’s Budget and Planning Commission, Alireza Dabir, had put the municipality’s debt to banks and contractors at more than 200 trillion rials.

“Tehran Municipality's financial resources and getting access to stable resources are the first challenges the capital’s municipality is facing,” Najafi noted.

Mehr News Agency (MNA), citing Tehran’s mayor, reported, “While the municipality’s budget in 2000 was 8.5 trillion rials, it is currently 17,900 trillion rials.”

“Although the budget has doubled in the past 10 years, in inflation-adjusted terms and taking purchasing power into account, this budget is 20 percent weaker than six years ago,” he said.

Corruption in Tehran’s municipality is so deeply rooted that it has become institutionalized
Former Tehran Mayor Morteza Alviri

Nevertheless, Najafi maintained, “Based on five-year Development Plan, the municipality’s current budget should have been 22,800 trillion rials---that means a deficit of 50 trillion rials or 22% reduction in the budget”.

Moreover, Tehran mayor insisted that the organization needs 22,500 trillion rials credit to successfully complete its current projects.

Najafi said he is specifically unhappy with what he brands as “costs invasion”, as well as the fact that 39 percent of its total budget is spent on the municipality’s inevitable expenditures.”Calling the ever-increasing process of expenses “alarming,” he promised to employ more efficient human resources rather than adjusting personnel.

Earlier, on August 9, Najafi had insisted his plan would be based on outsourcing and reviewing TCH’s personnel.

Former Tehran Mayor Morteza Alviri (1999-2002) has also reiterated that the capital’s municipality needs an overhaul to survive.

The volume of “corruption and law violation” in Tehran’s municipality is so high that other financial fraud looks like small change in comparison, Alviri said.

“Corruption in Tehran’s municipality is so deeply rooted that it has become institutionalized,” Alviri said August 14.

Outgoing Mayor Bagher Ghalibaf has been target of repeated accusations of financial corruption, May 14, 2017
Outgoing Mayor Bagher Ghalibaf has been target of repeated accusations of financial corruption, May 14, 2017

“The expenses in Tehran City Hall have gone so high that it will be the greatest challenge facing incoming Mayor Mohmmad Ali Najafi,” Alviri cautioned.

Alviri also criticized outgoing Mayor Mohammad Bagher Ghalibaf for not being transparent.

Ghalibaf, an Islamic Revolution Guard Corps (IRGC) commander and former chief of police, challenged Hassan Rouhani in May’s presidential election but dropped out midway in favor of another conservative candidate. Although he has widely been accused of corruption, Supreme Leader Ayatollah Ali Khamenei appointed him as a member of the Expediency Council on August 14.

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