Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Moves towards normal relations

HISTORICALLY, Britain's construction industry has had very close links with Iran.

Many major projects in the country were British-built but trading fell away dramatically after the 1979 revolution and deteriorated further throughout the country's devastating 10-year war with neighbouring Iraq.

British and other European companies started to re-enter Iran in the early '90s as the country tried to rebuild its economy. But the inability of the UK and Iranian governments to agree on repayment of debts outstanding from the Shah's pre-revolutionary regime led to the UK withdrawing its Export Credits Guarantee Department backing in 1994.

At that stage the Iranians were not even willing to recognise a debt, let alone any duty to repay it.

Britain's relationship with Iran was already very poor following Ayatollah Khomeini's 1989 fatwah - a worldwide death sentence - on author Salman Rushdie. The country's links with terrorism and poor human rights record also strained relations.

But relations improved dramatically with the election three years ago of President Khatami and of a more liberal government earlier this year. In 1998 Britain was able to resume short-term ECGD cover on goods sold on cash terms after the Iranian government gave assurances it would not act on the fatwah against Salman Rushdie.

Britain was keen to resume medium-term ECGD cover that would allow British firms to be involved in major projects and commissioned an economic review of the country.

Cover would probably have been resumed by now but for two events. First, a drop in oil prices last year raised questions about the country's economy, although a recent rise removed this concern.

Second, while agreement has been reached between the two countries on the fact that there is a debt to be repaid and even on the size of the debt, there is still no agreement on the technicalities of how the debt is to be repaid.

A spokesman for the ECGD said the figure was 'no more than a few million pounds' and added that the delay on resuming cover was down to 'negotiations on the method of repayment' rather than on repayment itself.

According to construction minister Nick Raynsford, it is just a matter of 'a few 'i's' to be dotted and 't's' to be crossed'.

Human Rights is still an issue.

The UK government has been particularly concerned at the recent trial of 13 Iranian jews. The jews had been accused of spying and Britain, along with many other governments, was concerned that they would not be given a fair trial.

Their fears were confirmed when, despite agreements, the trial was held behind closed doors.

Human rights were on the agenda during Mr Raynsford's construction industry trade mission.

He said: 'In the course of my meeting with the deputy foreign minister I set out some of the government's concerns on human rights issues.

'I don't pretend it will be easy but there is no question that relations are now on a much better basis and there is scope for further improvement. The mission helped.

Constructive engagement is the right way forward.'