CHAPTER SEVENTEEN:

Transportation

ARTICLE 126- In order to provide regional, transit, and multi-modal transportation services, the Islamic Republic of Iran Railway Company is authorized to establish international transportation companies in partnership with the ECO member-countries.

ARTICLE 127- The Ministry of Road and Transportation is authorized:

A- To sell or rent out to the qualified contractors and cooperative road maintenance companies part of the machinery, equipment and dwellings that are considered to be in excess of the needs, aiming at realization of the privatization policies, and on the basis of a by-law to be prepared by the Ministries of “Economic Affairs and Finance”, “Road and Transportation”, the Plan and Budget Organization; and to be approved by the Cabinet.

B- To take measures to reduce, and make adjustment in, the manpower of this sector on the basis of a by-law to be recommended by the said ministry and the Administrative and Employment Affairs Organization and to be approved by the Cabinet. The required financial resources to reform the manpower structure aiming at reduction of the said undertakings will be provided through Item (B) of this Article and within the framework of the annual budget bills.

ARTICLE 128- On the conditions that the government proprietorship of the railroads is persevered, the country’s comprehensive and coordinated rail

transportation policy is exercised, creation of monopoly in the non-public sector is avoided, and continuity of the service provision is secured, the Ministry of Road and Transportation is authorized to cede to the domestic real and legal persons of the non-public sector part of its undertakings pertaining to transportation of cargo and passengers, repair, maintenance and renovation of the network and the rail transportation fleet; and , in the case of necessity, to support privatization through joint venture between the non- public sector and the Railways of the Islamic Republic of Iran, and providing them with necessary facilities. The criteria and regulations of this Article shall be approved by the Cabinet.

ARTICLE 129- In consideration of the policy that aviation and air transportation (including aeronavigation, landing, take-off) is exclusive responsibility of government and must remain under full control of the State Aviation Organization, and in anticipation that no monopoly will be created in the non-public sector, and provision of the service will be continually guaranteed, government is authorized:

A- To take measure to cede to the cooperative and private sector the government share in the airline companies of the Islamic Republic of Iran: Iran Air (up to a maximum of 49%), Asseman Air Lines, Payam Air Lines, Naft Air Transportation, the Helicopter Services (Sakheh), Shipping Lines of the Islamic Republic of Iran, and its controlled companies, and the National Iranian Oil Tankers Company.

B- To revise the articles of association of the country’s air line companies (Asseman, Payam, Naft Air Transportation, and the Helicopter Services) through joint proposal of the State Aviation High Council, and the relevant executive agencies. Changes in the articles of association of the Islamic Republic of Iran Air Lines shall be approved by the Islamic Consultative Assembly.

ARTICLE 130- With preservation of the government sovereignty over the aviation and air transportation affairs (including aeronavigation, landing and take-off) and in observation of the upper part of the Article (129), the State Aviation Organization is authorized:

A- To take measures in order to complete and execute the airport and flight projects and develop the air fleet by attracting domestic and foreign investment and through joint-venture contracts, forward sales of the airport and flight services and settling the relevant obligations.

B- To collect two percent (2%) of the proceeds of the ticket sales of domestic-flight passengers, aimed at financing the execution of maintenance, improvement, flight security programs and development of the infrastructures at the airports, and also to utilize new airports, aviation and security equipment and systems upon approval of the State Aviation High Council.

ARTICLE 131- In order to provide assistance for procurement of the inter-city road transportation fleet and building passenger, cargo terminals and roadside convenience facilities by the non-public sector, with the priority given to the cooperatives and the War-veterans, the State Road Transportation and Terminal Organization is authorized to provide banking credit facilities, using domestic resources, in the frame of the administered funds with the banks and pay the differentials of the interest rate through its own internal resources. The amount of the said administered funds including the funds pertaining to the payment of the interest rate differentials will be determined in the annual budget of the said organization.

ARTICLE 132- In order to secure the financing required for developing, maintaining, and operation of the road transportation affairs, the State Road Transportation and Terminal Organization is authorized:

A- To collect tolls from movement of goods and passengers through the country’s roads on the basis of ton/kilometer and man/kilometer. The rate of this toll will be proposed annually by the General Assembly of the State Road Transportation and Terminals Organization and will be approved by the Economic Council.

B- To collect a maximum toll of fifty (50) Rials per ton-kilometer of the goods transported within the country from the international transportation companies undertaking transit transport, upon confirmation of the Minister of Road and Transportation, and through the frontier posts.

C- To collect one hundred percent (100%) of the damages inflicted to the technical buildings and the infrastructure installations, except the loss incurred as the result of unexpected natural events and calamities that the government, depending on its ability to pay, is responsible for their compensation.

D- Upon the collection, all the proceeds subject to this Article will be transferred to the State Road Transportation and Terminals Organization’s account with the Treasury General to be spent according to the agency’s annual budget.