Maku Free Zone to Make Its Mark
Maku Free Trade Zone or MFZ is one of Iran’s well known transit
points positioned in the west of the country. With just over 20 kilometers (13
miles) from the Turkish border and surrounded by mountains, MFZ has had one of
the best historical trading advantages through the ages. The small town of
44,000 people (2006 census) is separated by Zangmar River, which travels on
through the West Azarbaijan region. The designated zone itself encompasses just
over 5,000 square kilometers in total – the largest free zone yet. The local
population includes both Azeri and Kurdish speaking people who can also speak
The area officially became Iran’s latest official free zone in 2011 and was
sanctioned by the West in 2013. But it has had a slow time getting itself up
and running. Maku, like other free zones around the country does have
many advantages which include beneficial rates on all goods, flexibility in
visas for foreigners, and ease of credit for foreign business.
Iran’s Customs Administration Director Abbas Memar-nejad made the announcement
for the inclusion of Maku as a free zone in May 2013, adding that “Bazargan
border is the only ground entrance for trade between Turkish and Iranian
business people.” Iranian and Turkish businesses were then offered the
fortunate position of being the first nationalities to set up in the zone with
favorable rates for new production and storage facilities.
Recently Tehran’s Ambassador to Baku stated that Azerbaijan and the Islamic
Republic would like Azeri businesspeople to enter the Maku zone. Mohsen
Pakayeen said, “Maku region has the appropriate capacity for investment and to
this end interactions among investors can result in new and exciting economic
developments in the region.” The envoy underlined that Maku has a suitable
geographical location, rich mineral deposits and fertile agricultural lands.
Maku has been given a high priority by the governments of both Iran and Turkey,
who see the free zone as the main transit point between the two large
developing nations. The zone hosts the main Iran-Europe Gas Pipeline (IEGP),
which is currently being constructed by the Iranian Gas Company to meet the
much needed demand for gas from European consumers and businesses. The route of
the proposed pipeline will start at the gigantic South Pars Gas Field in the
Persian Gulf and will continue its way through western Iran to the Maku zone
area, near the Turkish border.
The pipeline consists of two principal sections: first, the Iranian section
which is called the Gas Trunkline 9 or IGAT-9. It starts in the Persian Gulf
city of Assaluyeh and ends on the northern Bazargan exit area just north of the
Maku town. Second, the section that crosses Turkey, Greece and enters Italy,
where the pipeline splits, sending gas to Switzerland, Austria and Germany in
the north and to France and Spain in the south.
The estimated cost of the overall project is around $7 billion. The project
comprises of 17 compressor stations, many of which pass through the free zone
itself. It has been suggested that China will part finance the whole operation.
Current estimates from industry magazines put the Chinese contribution at $42.8
billion for investment in Iranian refineries and pipelines. Some analysts
suggest Iran is also touting European companies to fund the project.
Although the area is one of the main transit points west of Iran, Maku and the
surrounding region has suffered from a lack of infrastructure investment over
the past decade, mainly due to the centralization policies of the previous
government. Airports in the area are currently below international levels of
acceptability for trade and investment. The authorities in Maku announced in
2013 that the construction of a new airport was underway, and there have been updates on its development in