Hyundai pulls out of Iran

The Iranian Regime and its media have stayed silent on the cancellation of a major construction project in Iran by South Korean conglomerate Hyundai, which is related to incoming US sanctions on the Gulf state.

On Monday, Hyundai Engineering & Construction announced that on Sunday it had cancelled a $521 million contract for building a petrochemicals complex in Iran. However, there were no mentions on the cancellation in Iranian state-controlled media and little Farsi-language discussion of it on Twitter.

Hyundai said: “The contract was cancelled because financing is not complete, which was a prerequisite for the validity of the contract, as external factors worsened, such as economic sanctions against Iran.”

The US sanctions on Iran’s energy sector and central bank are set to come into force on November 4, as part of the US plan to force Iran into agreeing to a new, stricter, nuclear deal, as energy exports are the main sources of revenue for the Iranian government and without them the economic crisis will only worsen.

Many companies, fearful of US sanctions, have pulled out of deals with Iran over the past few months, making Hyundai just the latest in a long line. And these cancellations have been causing major crises for the Iranian Regime as it delays the construction process.

Johns Hopkins University applied economics professor Steve Hanke said: “Now, the Iranians have to more or less start over and find somebody new. All of this takes time. As it takes time, the Iranian economy sinks.”

President Hassan Rouhani reshuffled the economic posts in his cabinet on Saturday, amid widespread domestic discontent over the crisis, and said that Iran can withstand these sanctions by turning to other countries like Russia, China, India, and those in the European Union.

But Hanke advises that given the significant pressure on the EU from Washington, it is more likely that Iran will finance the project with Chinese and Russian partners, even though the EU vowed to stay connected to the existing nuclear deal.

South Korea has vowed to abide by US sanctions, but it does appear to want to salvage its contracts with Iran. Foreign Minister Kang Kyung-wha asked US Secretary of State Mike Pompeo on Monday to be flexible in exempting South Korean companies from US penalties for Iran-related business. So far, we do not know the outcome.

The Hyundai contract was to build a petrochemical complex on Iran’s Persian Gulf coast near the southern town of Tonbak.

Source » ncr-iran

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