China National Transportation Equipment & Engineering Co Ltd (CTC) is finalising an agreement on the US$3 billion rail project to connect Tehran with the northeastern holy city of Mashhad, a Chinese source told Reuters.

Dalian Shipbuilding Industry Co, also state-run, has been in talks to build containerships and tankers for Iran, according to two sources who declined to be named.

China, Iran's biggest trading partner and long-time ally, has agreed to boost bilateral trade by more than 10 times to $600 billion in the next decade.

No longer subject to international sanctions, China sees Iran as a source of new trade and new markets as its own economy slows.

China's Export and Import Bank (EXIM) is expected to fund 85 percent of the 930-kilometre railway, providing engineering, procurement and construction services, said the source.

China EXIM Bank is Beijing's designated policy lender for large trade deals and overseas investments by Chinese firms.

Source: shippingazette.com