Construction, Engineering, and Manufacturing Companies of IRGC

The IRGC’s industrial activities began not long after the Iran-Iraq War, when President Rafsanjani’s government encouraged the IRGC to use economic activities to bolster its budget.

The corps took control of several confiscated factories and established the moavenat khodkafaee (headquarters of self-sufficiency) and moavenat bassazi (headquarters of reconstruction). These two headquarters established various companies active in the agriculture, industrial, mining, transportation, road con-struction, import, and export sectors.

Shortly thereafter, the IRGC established a reconstruction headquarters, which operated within the IRGC’s air force, navy, ground force, and Basij. In 1990, the headquar-ters became gharargah sazandegi khatam alanbia, abbreviated as Ghorb. Ghorb, also known as Khatam al-Anbia, established several companies active in agriculture, industry, mining, road building, transportation, import, export, education, and culture.

Khatam al-Anbia has since become one of Iran’s largest contrac-tors in industrial and development projects, and today is considered the IRGC’s major engineering arm, not unlike the U.S. Army Corps of Engineers. IRGC commander Sattar Vafaei stated in an interview that about 25,000 engineers and staff work for Khatam al-Anbia. Ten percent of these personnel are IRGC members and the rest are con-tractors. The company has launched an official Web site, as well as an internal journal called Road and Tunnel Magazine, though neither has published numbers reflecting the company’s assets.
According to the Khatam al-Anbia Web site, the company

– Has been awarded more than 750 contracts in different construcction fields, including dams; water diversion systems; highways; tunnels; buildings; heavy-duty structures; three-dimensional trusses; offshore construction; water supply systems; and water, gas, and oil main pipelines.

– Has completed 150 projects involving technical consulting and supervision

– Is currently implementing 21 new projects, many of which are slated for rural areas.

The Ministry of Oil, Transportation, and Energy and the mayor of Tehran have signed several contracts with the IRGC through Khatam al-Anbia. These projects are contracted to Khatam al-Anbia and are per-formed either by its subsidiaries or by private companies contracted by
Khatam al-Anbia. The Khatam Web site lists some of these companies, as well as the nature of their work. Two of the most prominent Khatam subsidiaries are Sepasad and Hara; the former is currently construct-ing Line Seven of the Tehran Metro,while the latter directs tunnel construction and excavation operations throughout the country. Other projects performed by Khatam subsidiaries include the construction of part of the Tehran-Tabriz railway, the Karkheh dam, reserve pack-ages and a jetty in the Pars Jonoubi Gas field, and a 900-km gas pipe-line from Asaluye to Iranshahr.

Subsidiaries are also engaged in sev-eral hydroelectric and dam-construction projects in West Azarbaijan, Kordestan, Kermanshah, Ilam, Lorestan, and Khuzestan.

Khatam al-Anbia is highly active in the oil sector and is said to be operating as the sole contractor for Iran’s gas industry.
The agen-cy’s deputy director for reconstruction, IRGC Brigadier Abdolreza Abedzadeh, said that the company had 247 ongoing “industrial and mining” projects and had completed 1,220 projects since 1990.

Iran’s oil ministry has signed a number of no-bid contracts with the com- pany worth billions of dollars. Government officials claim that these contracts were awarded because of the lower cost offered by the IRGC, its skilled corps of engineers, its experience with large projects, and its access to heavy machinery and sizable assets.

In one such contract, the ministry awarded Khatam $1.3 billion to build the aforementioned 900-km natural gas pipeline to transfer 5 million cubic meters of gas from Asaluyeh in the province of Bushehr to Iranshahr in the prov-ince of Sistan and Baluchestan.
When pressed as to why the minis-try waived the bidding requirement for Khatam al-Anbia, a ministry representative claimed that providing gas to underprivileged regions was an urgent necessity and that a formal bidding process would have taken more than a year to complete.

An additional $2.5 billion con-tract was awarded to Khatam al-Anbia without a bid to finish phases 15 and 16 of the Pars Jonoubi (South Pars) oil field.

Khatam al-Anbia deputy director Abdolreza Abedzadeh recently told the Iranian press that 70 percent of Khatam’s business is military related. However, employees are often less forthcoming. When ques-tioned as to the nature of the work, company employee and civil engi-neer Mohammadreza Rajabalinejad informed the Wall Street Journal, “I’m not allowed to tell you anything.”

Other employees are typically unwilling to discuss the nature of Khatam’s contracts as well.

Mem-bers of the Iranian press have complained that reporters “have repeat-edly asked this company to provide more detailed information on the company and the exact figures for completed projects, the number of personnel, and the problems facing this major contractor, but the com-pany has refused to comply.”

In an interview with the newspaper Sharq, Abedzadeh answered questions regarding the company’s funding and employment and also responded to allegations that the company had accepted certain gov-ernment contracts without engaging in a formal bidding process. He also admitted to receiving a no-bid contract for the Asaluyeh-Iranshahr pipeline project and justified the process by claiming that “[the govern-ment has] seen our work. We must have done something for them to be willing to award us the contract without bidding.”

He also acknowl-edged winning the no-bid contract for phases 15 and 16 of the South
Pars oil field, explaining that Pars Oil and Gas had “promised the proj-ect” to Khatam even before a foreign partner had pulled out of the contract for which Khatam had bid and subsequently won. Abedzadeh went on to explain,

So the foreign company withdrew from the consortium. What were we supposed to do? . . . We spoke with Pars Oil and Gas officials. We asked whether they wanted to repeat the tender. Was there enough time? We said we had worked on our documents.
We said you have our bid. Then they said they intended to award the contract without the formalities.

When pressed as to the nature of Khatam’s employment and funding, Abedzadeh emphasized that the IRGC’s military activities and Khatam’s construction activities are kept “completely separate” and that only 10 percent of Khatam’s labor is derived from IRGC ranks, and the rest consists of subcontractors. As for Khatam’s fund-ing, Abedzadeh asserted that the majority comes from Iran’s foreign currency reserve. In response to the interviewer’s question as to how the company obtained these funds if “the foreign currency reserve account was established so 50 percent would be reserved and 50 percent would be loaned to the private sector, not to the government,” Abedzadeh stated, “Others obtain those funds as well. . . . The government does not do us any favors. We are paid to do our work. We are fined if we do not. Our difference with private companies is that we do not get to spend our profits.” However, when asked whether profits from Khatam’s construction projects are used to fund defense initiatives, he admitted, “It does help. It helps the development funding the govern-ment provides for the armed forces.”

Source » rand

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