FRANKFURT (AFX) - Iran plans to cancel a 960 mln eur contract with companies from France, Germany and South Korea to build a new petrochemical plant, an oil ministry report said Monday.
In 2005 Iran awarded the contract to a consortium including Germany's Linde AG, France's Technip and South Korea's Hyundai.
A Linde spokesman said the loss of the contract would not have any negative consequences for the firm and that it had been paid in full for the work it had done on the project thus far.
The oil ministry's Shana news agency said the decision was made because local firms were deemed capable of carrying out the work for less money.
'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 mln eur saving,' NPC managing director Asghar Ebrahimi-Asl said.
'It is natural that these companies object,' Ebrahimi-Asl said, adding 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 hardline President Mahmoud Ahmadinejad, made after his election win in June 2005, to increase involvement of domestic firms in the energy sector. alfred.kueppers@afxnews.com amk/har COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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