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Source: Reuters

UPDATE 2-ThyssenKrupp, Siemens unaware of Iran train deal

Published: 30 May 2009 17:31:24 PST

* German engineering company says struck deal with Iran

* High-speed maglev train to run between Teheran, Mashad

* Schlegel seeks to build consortium

* Says deal worth up to 12 bln euros (Adds company comment)

MUNICH, May 27 - German engineering company Schlegel said on Wednesday it struck a deal for a project worth up to 12 billion euros ($16.73 billion) to bring a high-speed magnetic levitation train to Iran, but the two leading makers of such trains said they had no knowledge of the project.

Munich-based Schlegel Consulting Engineers said they had signed the contract with the Iranian ministry of transport and the governor of Mashad.

"We have been mandated to lead a German consortium in this project," a spokesman said. "We are in a preparatory phase."

The next step will be assemble a consortium, a process that is expected to take place "in the coming months," the spokesman said, adding the contract had been signed on Tuesday. The project could be worth between 10 billion and 12 billion euros, the Schlegel spokesman said.

Siemens and ThyssenKrupp, the developers of a high-speed maglev train called the Transrapid, both said they were unaware of the proposal. The Schlegel spokesman said Siemens and ThyssenKrupp were currently "not involved."

A representative of the Iranian transport ministry could not immediately be reached for comment.

Iran is seeking to build an 860-kilometre (520-mile) link between Mashad, Iran's holiest and second largest city, and Teheran, mainly to be used by pilgrims, the spokesman said.

The project would be funded by investors from Saudi Arabia and Iran, the spokesman said.

NOT IN NEGOTIATIONS

A spokeswoman for Thyssenkrupp said: "We have not received a contract for the Transrapid from Iran and we are not currently in negotiations."

A spokesman for Siemens said the company was "not aware" of any Iranian contract for the Transrapid.

Germany, one of those western nations involved in a long-running dispute with Tehran over its nuclear programme, has urged German companies to limit trade with Iran. But Germany has also been one of the biggest exporters to Iran.

Recent figures show Berlin has significantly cut the value of new credit guarantees it offers companies that do business with Iran, but German exports to the country still rose last year.

German companies receive the guarantees for exporting goods to markets considered risky, and the figures suggested companies are prepared to take the risk of doing business with Iran even without the safety net of export guarantees.

Germany is among six major powers seeking to persuade Iran to suspend nuclear work the West fears is aimed at making bombs.

Tehran says its nuclear programme is aimed at generating electricity but its refusal to halt uranium enrichment has drawn three rounds of U.N. sanctions since 2006, as well as separate U.S.-led financial and other measures.

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