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German rail operator phases out Iran projects

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German rail operator phases out Iran projects

German rail operator phases out Iran projects
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RALPH ORLOWSKI(Reuters)
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BERLIN (Reuters) - German state-owned rail operator Deutsche Bahn is phasing out projects in Iran after Washington imposed new sanctions against Tehran and said firms doing business with Iran would be barred from doing business with the United States.

New U.S. sanctions against Iran took effect last week and several European companies have suspended plans to invest in Iran in light of the U.S. sanctions, including oil major Total <TOTF.PA> as well as carmakers PSA <PEUP.PA>, Renault <RENA.PA> and Daimler <DAIGn.DE>.

Deutsche Bahn is involved in two projects in Iran via its subsidiary DB Engineering&Consulting, a spokeswoman said on Thursday.

"Both projects will be ended in August and September 2018 respectively," she said. "Due to the altered banking practice we have sought to bring the contract to an amicable and timely conclusion."

Deutsche Bahn signed a memorandum of understanding with the Iranian rail operator Bonyad Eastern Railways (BonRail) in May 2017 for the first project, which aimed to identify and address potential in rolling stock and organisation, she said.

The second project, which started around 1-1/2 years ago, was a consulting contract for Iranian state railway RAI that included restructuring the company, the spokeswoman added.

(Reporting by Gernot Heller; Writing by Michelle Martin; editing by David Evans)

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