The agreement was signed by Abbas Akhoundi, Iran’s minister of transport, and Graziano Delrio, Italy’s minister of infrastructure, during a four-day visit to Rome and Paris by Iranian president Hassan Rouhani.

‘We have held talks with China and some European countries for launching high-speed rail on affordable budget; I hope the talks will yield positive results,’ Akhoundi said.

The deal will mark the resumption of commercial relations between Iran’s railway and FS, which were broken off after the imposition of UN Security Council sanctions in 2006.

President Rouhani’s visit is being reciprocated this week by an Italian trade mission. Speaking to Italian news agency AGI before his departure yesterday, Mr. Delrio said Iran was “a very important gateway to the whole of the East”.

“The Iranian Republic intends to strengthen the country’s infrastructure, and is considering 10,000km of railways, thousands of kilometers of motorways, as well as ports and airports, and is in favor of partnerships between the public and private sectors, so the market is opening.”

FS is likely to work on the line between Tehran, Qom and Isfahan, which is the high-speed showpiece of the Iran’s ambitious new rail network.

Italcertifer, FS’s certification arm, is working on the design of an infrastructure and rolling stock test centre, while Italferr, FS’s engineering arm, will work on the construction of a metro in Mashhad, Iran’s principal city in the north-east of the country, for which it has already been named preferred bidder.

Iran has also been holding talks with Italy and France on the general renovation of Iran’s existing rail system.

Speaking on the sidelines of a rail conference on Sunday, 31 January, Mr. Akhoundi said he had been consulting with French and Italian companies on a “hire purchase” basis.

He added: “We have held talks with China and some European countries for launching high-speed rail on affordable budget; I hope the talks will yield positive results.”