Two companies linked to Iranian armed forces 'win' national data center contract in rigged bidding

Two companies closely linked to the Islamic regime's armed forces have won a massive contract to run the national data center after a call for bids was canceled by the government, according to Sarmayeh daily. 

Information Systems Iran, known as ISIRAN, and Zaeim Electronic Industries were awarded the contract after the government of Mahmoud Ahmadinejad issued a directive which rendered the project confidential and annulled the call for tenders. The national data center will house the digital information and documents of the state's various bodies.

This development comes after the Islamic Revolutionary Guards Corps (IRGC) bought a controlling stake in the Telecommunication Company of Iran through a proxy, the Tosse'eh Etemad Mobin consortium, in what was hailed as the biggest deal in the history of the Tehran Stock Exchange in late September. A private company, Pishgaman Kavir Group, had been disqualified from bidding on security grounds the day before the winner was to have been announced. The other group left in the competition, Moaseseyeh Mehr Eghtesadi Iranian, was also controlled by the IRGC through the Basij militia. (For more on the Iran telecom sale, go here)

The Telecommunication Infrastructure Company, under the control of the Ministry of Communications and Information Technology, had organized the call for tenders for the national data center. Four entities had responded to the call and purchased the bidding documents: Tacfam, ISIRAN, Zaeim, and a consortium made up of seventeen companies. Last month, TIC announced that a winner had been chosen, but did not name the group. After the government's directive was issued, the call for tenders was cancelled and ISIRAN and Zaeim were declared the joint winners. They will collectively run the national data center.

ISIRAN and Zaeim's connections to the armed forces have provoked concern given increasingly frequent indications that the IRGC is extending its influence not only into the country's political and security structures, but also into the economy.

In May 2003, German police halted the export of 44 high-voltage switches which were being dispatched to Zaeim Electronic Industries, according to the Wall Street Journal. The switches propagate powerful sound waves that can be used to dissolve kidney stones or sterilize food. They can also be employed as triggers for nuclear weapons. The switches had been ordered by German businesswoman Eva-Marie Hack on behalf of naturalized Swedish citizen Eddie Johansson, an Iranian native whose name at birth was Hojjat Naghash Souratgar. In a factually and semantically challenged statement, Zaeim Electronic Industries said, 'We strongly deny that we have been in the way of acquiring military equipment nuclear.'

ISIRAN's military links are more clearly established. It is a subsidiary of Iran Electronics Industries - company motto 'Western performance, eastern price' - which builds, among a diverse range of products, missile launchers and tactical communication systems. The public relations office of the Ministry of Defense and Armed Forces Logistics describes ISIRAN's principle mission as 'technical, training, and refurbishment support of the Armed Forces computer services.'

In an article published last year, Gooya News reported that the main staff of the Ministry of Defense had been moved to the ISIRAN building in Tehran's Nobonyad Square, which happens to be the postal address of Parchin Chemical Industries, which is under UN sanctions for proliferation transgressions.

(All articles on this blog may be reproduced for non-commercial use. Proper credit would be appreciated.)

We've got your number: IRGC buys controlling stake in Iran telecom

The Islamic Revolutionary Guards Corps (IRGC) bought a controlling stake in the Telecommunications Company of Iran (TCI or Sherkat Mokhaberat Iran) on Sunday in a half-hour operation whose outcome was known in advance.

Late the previous day, Pishgaman Kavir Group had been disqualified in the 11th hour from competing for the telecom shares for 'security reasons' by the Iranian Privatization Organization (IPO). The two remaining rival bids came from groups controlled by the IRGC: the Moaseseyeh Mehr Eghtesadi Iranian (Mehr Iranians' Economic Organization) and the Tosse'eh Etemad Mobin (Mobin Development of Trust) consortium.

The Tosse'eh Etemad Mobin consortium, linked to the IRGC's social affairs mutual fund, bought 50% plus one stock in the state telecom for 340.9 toumans a share which brought the amount of the deal to 7.8 trillion toumans (about $8 billion), the largest transaction in the history of the Tehran stock exchange.

The consortium is made up of three companies: Tosse'eh Etemad, Shahriar Mahestan, and Iran Mobin Electronics Development Company, according to Masoumeh Taherkhani writing in Donyayeh Eghtesad. Tosse'eh Etemad and Shahriar Mahestan investment companies are directly run by the IRGC's social affairs mutual fund. Mobin Electronics belongs to the Setadeh Ejraieh Farman Emam (The Staff for the Enforcement of the Imam's Decree), a labyrinthine foundation directly under the authority of Supreme Leader Ali Khamenei's office. The foundation is headed by Mohammad Mokhber, named by Khamenei in 2007. The chairman of Iran Mobin Electronics is Seyed Mostafa Seyed Hashemi, a former four-term conservative Majlis representative.

The sale of TCI was scheduled for September 9 (for a previous article go here), but was inexplicably postponed. At the time, it had been predicted that the price tag would be $7-$8 billion, though experts had said that the company's real value, considering its large mobile phone operations, assets, and the fact that it is a monopoly, was at least double that. The winner of the bid was announced yesterday, but the actual transaction will take place on Wednesday.

Moaseseyeh Mehr Eghtesadi Iranian lost its bid to purchase TCI, but the group can take comfort in the fact that the Iranian telecom will now be in the hands of a brother organization. According to its managing director Alireza Baghani in an interview with Iran Tejarat, Moaseseyeh Mehr Eghtesadi Iranian is a subsidiary of the Mehr Finance and Credit Institution, formerly known as the Mehr Fund, which is linked to the Basij and ultimately the IRGC. Though the Moaseseyeh Mehr Eghtesadi Iranian investment group was considered by the Privatization Organization to be a valid bidder, its web page is still under construction.

Privatization Organization head Gholamreza Heidari Kord Zangeneh claimed in an interview with Fars News that Pishgaman Kavir Group had pulled out of the bidding, but the group's president Mohammad Reza Rezainejad said in a statement on the company's web site, 'On Saturday September 26, at 3:39 PM, we received a letter from the Privatization Organization informing us that our company was not qualified to participate in the bid. But both the Privatization Organization and the telecom had approved our company.' Rezaipour told Fars News that Pishgaman Kavir Group had spent over 15 billion toumans (about $15 million) on its failed bid and that someone had to be held accountable for this sum.

According to Ayandeh News, Pishgaman Kavir Group received a fax from the Privatization Organization on Saturday afternoon, disqualifying the company for 'security reasons.' The group's spokesman Mostafa Sajjadi told Ayandeh News, 'It is up to legal bodies to determine who can participate in a historical bid of this nature, but why didn't they tell us from the beginning?' Sajjadi said that his group would pursue the matter in court.

Seyed Mehdi Tabai Aghdaie, member of the governing board of the Privatization Organization, told a televised press conference, 'Our organization could only look into the financial and technical validity of the bidders. Bodies outside the Privatization Organization had to look into the security qualifications.'


Opposition and human rights groups fear that the IRGC will now be able to tighten control over telephone and Internet communications in Iran. Though voicing concern over the acquisition, Mohsen Sazegara, a founder of the IRGC who is now a dissident in Washington DC, said that it would ultimately turn out to be a mistake on the part of the Revolutionary Guards. 'The struggle against the IRGC has entered a new phase in which an easily accessible entity like the telecom can be targeted,' Sazegara said.

The Revolutionary Guards make a grab for Iran's telecom

The Revolutionary Guards Corps is planning to purchase the Telecommunications Company of Iran (TCI or Sherkat Mokhaberat Iran).

The public notice for the stock offer was decided last year by the Iranian Privatization Organization. The sale of 50% + 1 stock, scheduled for Wednesday September 9, would represent the largest transaction in the Tehran stock exchange's 40-year history. The purchaser would become the controlling shareholder of the company and its 32 subsidiaries.

The market capitalization at the time of the sale will likely be $7-$8 billion, though experts say the company's real value, considering its large mobile phone operations, assets, and the fact that it is a monopoly, is at least double that. Other potential buyers are the Basij social affairs fund and Astan Ghods Razavi, which controls Imam Reza's shrine in Mashhad and has become a massive tentacular conglomerate, which includes everything from a pizza parlor chain to a carpet company.

"The IRGC has been involved in business activities through various departments like the Gharargah Khatam ol-Anbia for a long time," Ali Dini Torkamani, economist and professor in California, told Radio Farda. Gharargah Sazandegi Khatam ol-Anbia (Khatam ol-Anbia Construction Base) is the main contracting arm of the IRGC and employs some 25,000 officers, engineers, and civilian contractors according to IRGC General Sattar Vafai. Its various businesses include construction and oil extraction. The Iranian government has awarded the development of phases 15 and 16 of the vast South Pars gas fields to Gharargah Sazandegi Khatam ol-Anbia, or Ghorb for short. It is worth noting that Ghorb is linked to Iran's nuclear activities and is under sanctions by the EU and the US.

But beyond economic considerations, the IRGC's intention to buy TCI could also be motivated by security and intelligence, said Dini Torkamani.

Dini Torkamani also questioned a privatization drive that sells state assets to other state bodies rather than to the private sector.


(Most of the information in this piece came from Radio Farda's Alireza Ahmadi, Sarmayeh newspaper, and the RAND Corporation's 2009 report 'The Rise of the Pasdaran'.)

"Is a blue-collar wave of protest on its way?"

Last week I tweeted translations of a Voice of America program on the economic crisis in Iran. One of the guests, Dr. Fereydoun Khavand, economics professor at Paris's René Descartes University, cited portions of an article which warned that blue-collar protests were becoming more organized and that "if the trend continues and nothing is done to counter the fall of economic centers, a blue wave of protest, similar to the Green Wave, will be unleashed." Judging by the great number of retweets and blogs which reposted the translation, the topic struck a nerve. No less interesting was the source of the article, the Alef web site, run by Ahmad Tavakoli.


Tavakoli, a Principlist member of the legislature, is a staunch supporter of the regime and heads the Majlis Research Center. He has managed other news outlets, most prominent among them the conservative Resalat daily, which he also founded. He has a Ph.D., presumably a real one, from the University of Nottingham.


Alef web site, like the man who runs it, is a vocal critic of Mahmoud Ahmadinejad's policies. Though Ahmadinejad is also considered a principlist (or oosoolgara - one who seeks a return to the founding principles of the revolution), Tavakoli is close to the more pragmatic wing of the movement which is led by Majlis Speaker and Ahmadinejad rival Ali Larijani.


In early August, Tavakoli stated, "Mr. Ahmadinejad, now that you have been re-elected with 25 million votes, it is time to change your past ways and show greater obedience to the law. In the recent unrest, the rights of the people were violated… at the hands of some saboteurs [rioters] and some officers. I do not mean to undermine the efforts made to maintain security and neutralize enemy plots… but the reality is that the rights of the detainees have been violated and the law has been trampled." (quote courtesy of Tehran Bureau). Tavakoli was also one of over 140 legislators, including Larijani, Deputy Majlis Speaker Mohammad Reza Bahonar, and Majlis cultural committee chairman and former Speaker Gholam Ali Haddad Adel, who did not attend Ahmadinejad's Now Rouz or New Year celebration in late March.


The following is a translation of highlights of the Alef web site article by Mohsen Mehdian, posted on August 22, and entitled 'Is a blue-collar wave of protest on its way?'

On Sunday, the workers of the Bukan textile plant discovered that their manager was back at the factory after a long absence. He was accompanied by several Bank Melli experts who were making a list of the machinery and assets to be confiscated. A number of workers immediately rushed to the plant and told the manager that they were taking control of the machinery and that the experts had to go through their picket line if they intended to make lists or confiscate anything.

In Tehran, the workers of the Dena Tire and Rubber Manufacturing Company held up signs saying: 'Incompetent director, resign, resign!' and 'Sacking 4 representatives is an insult to 2,000 employees!' The Business Court of Justice has ruled that the fired employees must be reinstated, but management has refrained from carrying out this order so far. The workers have been demonstrating daily from 6 AM to 2 PM at the factory.

On Sunday morning, the workers of Haft Tappeh's agricultural-industrial plant went on strike to obtain back pay.

The economic downturn is getting worse. The Economics Minister says that monetary policy must be reformed. The Chamber of Commerce has warned of the continuation of the crisis and its experts have said that the recent events have led to a lack of confidence in the economy. None of the 33 foreign guests invited to a seminar at Sharif University attended. These guests did not even intend to invest any money and their applause at the event would have sufficed. Experts say that Neda's funeral and the show trials are to blame.

The authorities think they can turn things around by playing with the money supply. But their policies mean that the people's purchasing power has fallen by 52%.

According to official statistics, unemployment in Tehran has risen by 3%. There are news reports of layoffs over the past month and a half: 500 at Iran Wood Panels, 900 at Long-Distance Communications Industries, 230 at the Azadi Hotel... In 500 factories, 200,000 workers have not been paid for three to 50 [sic] months.

This is natural. Iralco [aluminum works] is forced to sell its goods 700 toumans under market value, and even then, given the high price of aluminum in Iran compared to world markets, buyers are staying away. Iralco's production has slumped by 50%.

With over one million tons of sugar imports last year, 50% of sugar manufacturers are operating at a loss. Production is practically at a standstill in the other 50%.

Bank check transactions have fallen by 42% in one year. Despite this, the number of bounced checks has increased by 7.8%, an unprecedented level since the end of the Iran-Iraq War.

Reports speak of a precipitous fall in 150 companies on the stock exchange

Household appliance makers are operating at 40% capacity.

Construction in Tehran has collapsed by 60%.

Outstanding debts to banks are at 56 trillion toumans.

The number of unemployed and semi-employed is being affected by this downturn and the regular bankruptcies of factories. Workers will fall below the poverty line and will turn to the black economy in greater numbers. The blue collars will be the losers of the new situation.

Reports in the past months speak of the widespread organization of blue-collar protests. If the current trend continues and nothing is done to counter the fall of economic centers, a blue wave of protest will be unleashed.

This wave will resemble the Green Wave and may even go beyond the efforts to foment the 'soft overthrow' [of the regime]. Some may even call it Operation Ajax 3 (NB Referring to the 1953 coup in Iran which was codenamed Operation Ajax by the CIA). The green wristbands will be replaced by blue collars. This grassroots movement will be provoked by fears of not being able to afford food for one's family, formula for one's infant, rent, education for one's child, or health care for one's spouse.

Every person who becomes unemployed will take at least four others below the poverty line. Cracking down on the Blues or even organizing trials will not prevent corruption or social decay.

We must shake ourselves out of this Green trance and be more concerned about the blue roar.