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South Korean bus manufacturer Daewoo Bus Corp. and an Iranian company have teamed up to build buses in Iran, the official Iranian news agency and a Daewoo Bus official said Thursday. The agreement comes as U.S. lawmakers weigh even deeper economic sanctions on Iran in a bid to pressure the country to halt uranium enrichment and abandon its controversial nuclear program.

Saeed Khademi, the director of Iranian automaker Ardebil Sabalan Khodrow-Maywan, said Wednesday the two firms would build a $30 million factory by next March in Ardebil, about 370 miles (600 kilometers) northwest of the capital, Tehran. The plant, which is slated to be completed by March 2010, would have a production capacity of 2,000 buses per year and would produce some 800 city and intercity buses in the 18 months after its inauguration, Iran's official news agency IRNA quoted Khademi as saying Thursday.

Based on the agreement, the engines and gearboxes would be manufactured in South Korea. But production would increasingly shift to Iran, where about 60 percent of the parts would be made, IRNA said. J.G. Yang, a Daewoo Bus official in charge of the firm's Middle East exports, said the company plans initially to supply completed buses built in South Korea but will later send components that will be assembled into complete buses in Iran.

The venture comes as U.S. lawmakers are looking at stiffening existing sanctions on Iran to pressure the country to halt uranium enrichment, which can produce fuel for a nuclear reactor or fissile material for a bomb. The U.S. suspects Iran is using its nuclear program as a covert way to develop weapons - a claim denied by Tehran. The proposal before U.S. lawmakers would penalize foreign oil firms and shippers that do business with Iran. However, past sanctions have failed to change Iran's behavior, and the hard-line government has been reaching out to international companies with promises of lucrative oil contracts and other business deals.


Xantia

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