Iran has signed an investment contract to build a global gold and jewellery trade centre known as "Jewel City" in the free trade zone of Imam Khomeini Airport City (IKAC), the Ministry of Roads and Urban Development News Portal reported on March 21.

The centre is expected to increase exports of gold and jewellery products, create sustainable employment for thousands in the precious stone cutting and processing industry and develop commercial tourism.

Akbar Hosseini, Director General of the Investment and Resource Mobilisation Office of Imam Khomeini Airport City, announced the signing of the investment contract for the project, which comes after two years of negotiations and technical-economic model evaluations.

Tehran's main international airport, Imam Khomeini International Airport (CODE: IKA), is within the Imam Khomeini Airport City Free Trade Zone (FTZ). Established to encourage international trade, investment and logistics, the FTZ provides various benefits such as tax exemptions, relaxed customs procedures and simplified business development, according to a designation in 2021 by the former Rouhani administration.

"Considering Iran's significant capacity in producing gold artefacts, jewellery, and processing precious stones, this project aims to concentrate top producers in this industry and leverage the advantages of the free trade zone," Hosseini said.

The project will be implemented with the allocation of 2 hectares of land in the free trade zone's core area, with private sector investment valued at over IRR26,000bn ($287mn at government rates).

According to Hosseini, "Jewel City" will include production and commercial units and a "magnificent exhibition hall" that can serve as Iran's permanent international jewellery industry exhibition centre.

"With the opening of this project at Imam Khomeini Airport City, reputable domestic brands will have the opportunity to enter international markets," he added.

The strategically located "Jewel City" aims to transform the jewellery industry and become an attractive destination for traders, investors and jewellery enthusiasts.

Earlier in 2018, Netherlands Airport Consultants (NACO) released its designs for IKAC as part of a plan to turn the remote outpost into an air-and-land free trade zone, bne IntelliNews reported at the time.

IKAC was planned more than twenty years ago. The pace of progress has increased in recent years with the second terminal, named Salam designated for Hajj tourists heading to Saudi Arabia’s Mecca.

The original masterplan for IKAC included the creation of a 1,500-hectare free trade zone and a 2,500-hectare special economic zone within a 13,700-hectare area surrounding the site.

The airport has faced several setbacks in recent years. French airport development firm Bouygues pulled out last summer apparently due to financial and political issues.

But Iran’s Deputy Minister of Roads and Urban Development Asghar Fakhrieh-Kashan dismissed that claim at the time, Iran Labour News Agency reported.

“Cancellation of the agreement was by no means related to banking restrictions,” he said at the time.

Bouygues was meant to work with NACO, but neglected to communicate with the Dutch, the Iranian side said. “NACO immediately held a tender [to replace the French company] and dozens of international companies participated. We will soon choose a qualified company,” Fakhrieh-Kashan said.