Tehran mayor under fire as unresolved China deal stirs controversy
Tehran’s mayor, Alireza Zakani, has found himself back in the spotlight amid growing concerns surrounding a €2 billion deal for electric buses with China.
Tehran’s mayor, Alireza Zakani, has found himself back in the spotlight amid growing concerns surrounding a €2 billion deal for electric buses with China.
Although this deal is not new, Zakani is facing renewed scrutiny from the General Inspection Organization of Iran (GIO), further intensifying tensions around his leadership and sparking debates over his handling of the city’s key challenges.
Following a trip to China in January, Zakani announced to the Tehran City Council that he had signed several significant agreements, including a €1.67 billion contract to improve the city’s transportation system.
The deal was set to cover a wide range of transportation products, including electric buses, taxis, vans, subway cars, and traffic cameras. However, despite the City Council approving a €2 billion budget for this purpose, members are still in the dark about the exact details of the agreements signed by Zakani.
The financial complexity of the deal has raised red flags. Tehran’s municipality lacks the hard currency reserves needed to cover the cost, leading to speculation that the funds will be drawn from Iranian oil revenues held in China.
The involvement of the Oil Ministry in the process suggested that the deal’s approval likely came from the highest echelons of power, with reports indicating the Supreme Leader’s office may have sanctioned it.
Most recently, the GIO, which operates under Iran’s judiciary, convened a session on the China deal. Media outlets, eager for information, reported that participants were surprised by the leak of the session’s news and were unwilling to disclose details discussed.
Tehran-based Didban News noted that the meeting addressed “ambiguities and issues regarding the municipality’s contract with China,” highlighting the continuing opacity surrounding the deal.
Speculation also emerged regarding a potential travel ban imposed on Zakani, attributed to the GIO’s ongoing review of the €2 billion contract. The issue has reportedly reached the Supreme Leader’s office, where Zakani is believed to have lodged a formal complaint about the GIO's scrutiny.
According to sources like Rouydad24, Zakani wrote a 10-page letter to Khamenei, expressing grievances against Mohammad Mehdi Bolandian, a senior GIO official.
The China deal is just one of the controversies enveloping Zakani's tenure. Earlier this year, Zakani faced a public outcry when a popular petition to unseat him gained significant traction.
In July, over 71,000 people signed the petition, which criticized his management of the capital, including the repurposing of green spaces for mosque construction and commercial developments. Many argued these decisions reflected a broader failure to address Tehran’s most pressing issues.
Zakani, a hardliner who was among the few candidates approved by the Guardian Council to run in the 14th presidential election, withdrew from the race in favor of other conservative figures.
His tenure as mayor has been marred by unresolved issues, from mismanagement of public spaces to his controversial stance during the 2022 “Woman, Life, Freedom” protests, where his name was included in sanctions imposed by the United Kingdom.
As a former leader of the Student Basij Organization, Zakani’s past continues to haunt him. His trip to Brussels in 2022 also ignited outrage, with critics like Belgian MP Darya Safai condemning his presence, citing his involvement in an organization sanctioned for human rights violations.
Addressing a Security Council meeting on the Middle East, Ambassador Danny Danon warned Iran to get its “bloodstained hands off Lebanon.”
During the speech, Danon pointed his finger directly at Iran’s UN representative - figuratively and physically.
The Iranian ambassador sat and listened. In previous Security Council meetings, Iran used to exit the room as soon as Israel took the stage. This time - they didn't.
Danon’s focus was on painting a picture where Lebanon could be an ally of Israel – and Iran as their common adversary.
“Lebanon belongs to the Lebanese, not to the Iranians!” he said.
He referred to Lebanon as a hostage of Iran-backed Hezbollah and urged its people to reclaim their sovereignty.
The Israeli ambassador also emphasized that his country does not seek to remain in Lebanon but is there to push Hezbollah away from the northern border to ensure the return of nearly 70,000 residents who became refugees in Israel after October 7.
Jonathan Harounoff, an international spokesperson for the Israeli mission to the United Nations, told Iran International that “Israel is not at war with Lebanon. It does not seek war with Lebanon."
The Israeli military has in recent weeks been launching multiple airstrikes against Hezbollah’s positions, killing the group’s leader Hassan Nasrallah and almost all of its other commanders. However, there seems to be no end to the attacks in sight.
Twenty-two people were killed and 117 injured in the latest Israeli airstrikes in Beirut near a Shia area Thursday evening local time, according to Lebanon’s Health Ministry.
The apparent target was Wafiq Safa, Hassan Nasrallah’s brother-in-law and one of Hezbollah’s high-ranking security officials, but that has yet to be confirmed.
Israel's military said its troops opened fire near a UNIFIL base in southern Lebanon after instructing UN forces in the area to remain in protected spaces on Thursday morning.
Israel repeatedly says it targets military capabilities and militants in Lebanon, taking steps to mitigate risk of harms to civilians, accusing Hezbollah - as it does with Hamas - of hiding among civilians.
Israel’s military said on Thursday it uncovered a tunnel that crossed into Israel from Lebanon, finding weapons allegedly stored by Hezbollah in southern Lebanese villages. Danon said the findings support what Israeli security forces have been saying for months of a plan for Hezbollah to allegedly carry out another Oct 7 attack in the north of Israel.
Lebanon’s UN representative, Hadi Hachem, accused Israel of violating the blue line, saying it contravened resolution 1701, and that civilians, historical sites and a water station were recently targeted.
“This is a clear aggression of an independent, sovereign state,” said Hachem.
Hachem made no mention of Iran, and said only diplomatic solutions would be the right path forward, calling for an immediate ceasefire.
Israel's representative responded that Hezbollah brought Lebanon into the conflict, saying their silence has forced Israel's hand. Danon even encouraged Lebanon's representative to come sit next to him. Hachem was seated indirectly next to the representative of the Islamic Republic of Iran.
Hezbollah began firing rockets into Israel on Oct. 8, 2023, in support of Hamas, who launched a surprise attack on Israel, killing more than 1,200 people and holding hundreds hostage.
The future of Lebanon, Danon said, must be one where there is no Hezbollah in place.
Behnam Ben Taleblu, a senior fellow at the Foundation for Defense of Democracies, said now is the time for the Lebanese army to guard Lebanon against Hezbollah.
"While it may be fashionable to frame Israel’s pushback against Hezbollah as part of a third Lebanon war, the comment by Ambassador Danon is instructive. The occupying power in Lebanon is the Islamic Republic of Iran, which not only benefitted for so many years from using Lebanon as a forward operating base against Israel, but now is intent on wrecking it rather than call its proxy Hezbollah to stand down," said Taleblu.
Iran’s ambassador to the UN, Amir Saeed Iravani, spoke of destruction in Gaza, and also spent time eulogizing Hezbollah Leader Hassan Nasrallah.
He said he was a “critical factor for peace and stability in Lebanon” and said he was the “best remaining hope for advancing the ceasefire process."
Nasrallah, the leader of Hezbollah, was killed in a targeted Israeli airstrike in Beirut on September 27.
Israeli forces have also killed his would-be successors, according to Israeli prime minister, Benjamin Netanyahu.
In a commentary in Etemad newspaper, Abbas Abdi wrote: "There is no turnkey solution for the country's problems. If the President cannot bring about any improvement in the areas of Internet restrictions, women's freedom, foreign relations, and the way the state television operates, his national reconciliation will fail."
Pezeshkian’s slogan of reconciliation is largely interpreted as a call for cooperation among political factions within the Islamic government, rather than a true national reconciliation that would involve giving the public a greater voice in governance or addressing their demands.
"It’s not like flipping a switch to turn the lights on and off," Abdi said regarding the idea of a quick fix for the deep-rooted public alienation from the government. He added that if Pezeshkian’s promises to the people are not fulfilled, even the reconciliation among factions within the establishment will quickly unravel.
Abdi reiterated his post-election message to Pezeshkian: "The election is ongoing every day. The ballot boxes remain open in communal centers across cities and villages. Anyone who voted can retract their vote, and those who abstained can now cast theirs. Votes are not just pieces of paper; they embody the free will of the people. What drives the nation to decide how to act with these open ballot boxes is the government's official policies."
The reform-minded commentator added that the people have different ideas about how quickly they expect the promises to be met. At the same time, those who have refused to vote perhaps like to justify their political act by proving that Pezeshkian has failed.
Abdi also pointed out the oddity that even the government seems to overlook Pezeshkian's slogans and approach, despite his emphasis on "reconciliation." For the public, reconciliation is not the end goal but merely a step toward addressing pressing issues like improving the economy, curbing inflation, ensuring access to essential goods and services, lifting internet censorship, addressing women's concerns, and removing sanctions, among other challenges.
But Pezeshkian has given up everything in the interest of trying to bring about a reconciliation between various political groups. Some have even questioned his idea of reconciliation following his meeting with the ultraconservative Paydari party, that was perceived by reformists as tantamount to an undeclared coalition with his political opponents.
On Monday, ITC Minister Sattar Hashemi dismissed the idea of eliminating internet filtering or providing equal access, instead proposing "smart management of the Internet." In response, pro-reform website Fararu questioned the administration's resistance to pressures, including those on internet restrictions, and asked, "What happened to Pezeshkian's promises for change, including in internet access?"
During the June presidential election, Iranian poet and influencer Hossein Jannati said he would vote for Pezeshkian only if his advisers, former foreign minister Javad Zarif and former ITC minister Mohammad Javad Azari Jahromi, guaranteed the end of the Morality Police and social media filtering, and promised to inform the public if the president faced pressure to oppose the people's will. Both ministers, along with Pezeshkian, gave their assurances.
Pezeshkian wrote in an X post on 30 June: "I guarantee that the entire administration will wholeheartedly stand against compulsory patrols, filtering, the filter-breaking trade and all other pressures from outside the administration in all of their meetings."
However, these were not the only promises made by Pezeshkian before, during and after the election. Tasnim News Agency listed 14 of his promises.
Interestingly, the IRGC-linked Tasnim's list does not include controversial social and cultural problems such as Internet access and women's issue. The two matters are not even included in reformist Etemad daily's list of 6 of Pezeshkian's promises! An indication that both hardliners and reformists prefer to turn a blind eye on these problems.
This volume of fuel being siphoned out has cast doubts over the Islamic Republic’s narrative, which for years has placed the blame for smuggling on small-scale operators along the country’s borders. Instead, recent revelations point to a systemic operation involving high-level complicity.
Economist Mousa Ghaninejad ignited this debate in October 2024 when he provided an updated figure for the amount of gasoline being smuggled from Iran. Drawing from official statistics, Ghaninejad estimated that of the 120 million liters distributed daily across the country, only 70 million liters are actually consumed domestically.
“The rest is smuggled out of the country,” Ghaninejad said, pinning the figure at roughly 50 million liters per day—an amount that dwarfs previous estimates of around 20 million liters.
Transporting such an enormous quantity of gasoline would be a logistical feat beyond the capacity of the small-time fuel carriers the Islamic Republic often claims are responsible.
Hossein Raghfar, an economist, in an interview with the Eghtesad 100 news outlet on Wednesday went ahead with official figure of 20 million liters, saying: “This volume of smuggling cannot be the work of small time smugglers in border regions. It is definitely done by government entities.”
These smugglers, who typically use 2,000 to 2,500-liter tanks mounted on Nissan Junior pickup trucks, would need a convoy of at least 20,000 fully loaded trucks to move 50 million liters of gasoline in a single day. If these 4-meter-long trucks were lined up end to end with a three-meter gap between them, the convoy would stretch over 140 kilometers, highlighting the implausibility of small-scale smugglers being solely responsible for this volume of fuel trafficking.
Even if one considers the lower-end estimate of 20 million liters, which has been consistently cited by insiders and the state media for years, a fleet of around 8,000 Nissan trucks would still be required to transport the fuel.
Larger tanker trucks, which can hold up to 40,000 liters, would still need to operate in significant numbers, requiring at least 500 tanker trucks to move 20 million liters and over 1,250 trucks to handle the 50 million-liter figure.
Systemic smuggling networks
Economic journalist Reza Gheibi explained that this volume of fuel smuggling is unlikely to be carried out by individuals or even small groups. "This huge volume of smuggling is for sure systematic, and we can find some signs of it as well,” Gheibi said. He pointed to cases in which underground gasoline pipelines have been discovered, particularly in southern provinces, and added that fuel is also being smuggled via small ships operating from ports controlled by the Islamic Revolutionary Guard Corps (IRGC).
“There is no monitoring over them, and they work totally clandestinely,” he added. “So, part of the expense of IRGC’s trans-border activities is made through the fuel smuggling.”
Gasoline in Iran is sold at a subsidized price of around two cents per liter, but the government is forced to buy millions of barrels of fuel at a price of nearly 60 to 70 cents per liter. Smugglers can then sell the fuel on the black market for as much as 40 cents per liter, creating a massive profit margin. For those behind the operations, this translates into millions of dollars of profit every day.
According to experts the sheer scale of the operations suggests the involvement of larger and more organized networks.
Smuggling networks within the system
The involvement of officials in fuel smuggling operations has become apparent over recent years, as investigations and arrests have revealed a network of corruption within government centers. In December 2022, Aref Akbari, the Public and Revolutionary Prosecutor of Hormozgan Province, southern Iran, announced the arrest of six rural mayors, three employees of the Ministry of Industry, and two members of the Engineering Organization on charges of collaborating with fuel smugglers. These individuals allegedly issued fraudulent certifications to heavy machinery owners, enabling them to receive subsidized fuel without actually operating the machinery.
In another high-profile case, the Public and Revolutionary Prosecutor of Iranshahr in Sistan and Baluchestan Province, Saeed Rashki, announced in May 2021 that the head of a local parliamentarian’s office had been arrested on fuel smuggling charges. Nearly all employees of the local oil company were also taken into custody, with only one or two individuals spared.
These cases provide a glimpse into the extent of officials’ involvement in fuel smuggling. In May 2023, Mohammad Jafari, Deputy Head of the Headquarters for Combating the Smuggling of Goods, stated: “We estimate that a total of 25% of the fuel allocated to power plants is being smuggled.” While Jafari’s comments did not specify which power plants or the type of fuel involved, they point to large-scale smuggling operations embedded in the country’s fuel distribution infrastructure.
Such reports have consistently pointed to the complicity of government employees, while there is little evidence to support the idea that small-scale fuel carriers are responsible for smuggling gasoline on this scale. Instead, the available data suggests that lower-level government workers, many of whom have direct access to fuel distribution networks, play a central role in diverting fuel from the official supply chain into the black market.
Involvement of armed forces
One of the concerns surrounding the gasoline smuggling crisis is the role of Iran’s armed forces, particularly the IRGC, in facilitating or even directly participating in the operations. The IRGC controls a significant portion of the country’s transportation networks and border crossings, which according to Gheibi, makes it difficult to imagine that such large volumes of fuel could be smuggled out of the country without the IRGC’s knowledge or involvement.
With an average of 35 million liters of gasoline being smuggled daily, the theft appears to be organized through a network of actors linked to supervisory bodies, with the IRGC controlling much of the oversight of both the transportation network and the borders, as suggested by economic expert Gheibi.
