Iran is to cancel a 960-million-euro contract with companies from France, Germany and South Korea to build a new petrochemical plant, an oil ministry report said Monday.
The ministry's Shana news agency said the decision was made because local firms were deemed capable of carrying out the work and at a saving.
"The Olefin 11 contract will be cancelled and the project is to be implemented by the National Petrochemical Company (NPC) and domestic contractors with a 260-million-euro saving," NPC managing director Asghar Ebrahimi-Asl said.
In 2005 Iran awarded the contract to a consortium including Germany's Linde, France's Technip and South Korea's Hyundai. The deal is for the production of 2.4 million tonnes of ethylene per year to feed a national ethylene grid and 11 petrochemical plants.
"It is natural that these companies object," Ebrahimi-Asl was quoted as saying, but added that the firms will not be compensated and are only to be paid for the number of hours worked.
The move is in line with a promise by hard-line President Mahmoud Ahmadinejad, made after his election win in June 2005, to increase involvement of domestic firms in the energy sector. |