Japan looks likely to turn down an Iranian request to provide a loan in yen for the building of a 770-kilometer railway line that will link the eastern city of Meshed near the Russian border and Bafq in central Iran. According to Kyodo News, the Japanese are anxious not to antagonize the United States, which accuses Iran of sponsoring terrorism and developing weapons of mass destruction
Diplomatic sources in the two countries confirm that there had been efforts to finalize the Iranian loan request ahead of the first-ever visit to Japan by Iranian President Muhammad Khatami, which is scheduled to take place from October 31 through November 3.
Earlier, it was reported that Iran had wanted Japan to announce the provision of the loan before Khatami's visit. Indeed, the government in Tehran had made little attempt to mask its intention to link the future state of the two country's economic relationship to the railway project. It even described the consent to the loan request as a "prerequisite" for Khatami's visit, which would be the first by an Iranian leader to Japan in four decades.
In August, the Japanese International Trade and Industry Ministry dispatched a team of 10 experts to Iran to study the issue. However, now it appears that the Japanese have gotten cold feet.
Earlier in October, Japan and Iran signed an agreement according which the Japanese will lend 7.5 billion yen to help Tehran to build a dam on the Karun River in the southwest of Iran. In so doing, they revived an inter-government loan program that was frozen in 1993, when Japan lent 38.6 billion yen to Iran as the first installment of a series of loans for the dam project. At this stage Tokyo has no plans for providing any more funding for the Karun dam. — (Albawaba-MEBG)
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