TEHRAN: Iran warned Renault on Tuesday that the production of its popular Megane sedans in the country will be contingent upon the fate of the controversial L90 project.

Mohsen Shaterzadeh, deputy industries minister for economic and international affairs, told ISNA that Megane production 'was expected to begin next month'.

He said the Ministry of Industries and Mines has rejected Renault's request that the Iranian side exports L90 parts, adding that Iran wants to export 'complete cars'.

The official said, however, that talks are still continuing on the issue, and that the giant French carmaker has accepted other conditions set by Iran for the project.

"Renault has proposed that it is ready to accept export of 20 percent of L90 parts," he said, adding that the ministry does not accept this as it is against national interests.

"The mother contract stipulates export of cars and the (Iranian) Parliament wants 20 percent of L90 cars produced in Iran to be exported."

He said the L90 agreement, which also involves the two major Iranian carmakers Iran Khodro and Saipa, has not yet been finalized, implying that it can be cancelled anytime.

"The main reason why the project has been halted is that Renault has failed to modify the agreement despite promises made long time ago," he said, adding that the ministry has come to the conclusion that Renault is biding for time.

He said investments by Iranian companies account for a major portion of the 600 million euros to be put into the project, in which Renault will invest only 27 million.

The decision to halt L90 project has caused concerns among the 50 major Iranian car part makers which have invested heavily in the huge project.

Some experts believe that the cancellation of the project will not serve national interests as much as its continuation will.

An automotive industry official said last week that the project could create 50,000-70,000 jobs in the first phase. "At least 50,000 jobs will be lost if the project is cancelled," said Sassan Qorbani, a member of the board of directors of Association of Car Part Makers.

A senior Renault official told ISNA that the giant carmaker has accepted a number of conditions, including greater share of domestic car part makers in the project, removal of the term 'exclusively' from the contract and designing a new car on the L90 platform in cooperation with Iran.

However, talks on export of (Iran-assembled) L90 cars are still underway, he said, speaking on the condition of anonymity.

منبع:zawya