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First major contractor tests the water in Islamic republic ECGD review of country 'well advanced' Costain in £100m Iran bid

COSTAIN has become the first big UK contractor to make it on to the tender list for a major construction project in Iran.

The firm is working with Rolls-Royce to bid for a £100 million scheme at the port of Shahid Rajee in the Bandar Abbas region on the Straits of Hormuz.

The UK duo is competing against two unknown foreign rivals for the scheme, which features grain storage silos, jetties and handling equipment.

Tender documents arrived at Costain's Maidenhead offices this week.

Under local rules, Costain had to buy the documents from its client, the Ports and ShippingOrganisation of the Islamic Republic of Iran, for £200. The contract will be a turnkey deal and let under a build, operate and transfer (BOT) arrangement with bids due for return on March 11.

Costain commercial manager Jerry Grennhaulgh said: 'They are talking about BOT, but what they normally mean is for someone to find the finance.'

The pair will apply for backing from the Export Credits Guarantee Department, which underwrites UK firms bidding for work abroad.

The ECGD withdrew cover for Iran in 1994 due to concerns over its inability to service debts, but the country is now covered by the Good Projects Initiative.

Launched in July, the initiative provides cover for firms on condition that cash payments are made into a safe account. Sectors covered include airports and ports, mining, oil and gas, petrochemicals and telecommunications.

Full ECGD backing for contracts in Iran may be restored soon.

ECGD spokesman Robin Ogleby said: 'A review of the market in Iran is well advanced and there should be an outcome in the New Year. We are already looking at several deals in the oil and gas sectors.'