SEVENTY years after it undertook its first construction project in Iran, Costain is returning to the Muslim country with a $1.6 billion (£878 million) contract.

On the orders of Reza Shah the Great of the Pahlavi Dynasty, Costain built the TransIranian railway, which was completed in 1939.

The UK engineer is returning as part of a consortium to Iran, which was last night awaiting the results of its presidential election, to oversee the building of a second gas treatment plant by the National Iranian Gas Company next to Bid Boland 1, the existing gas refinery.

Stuart Doughty, chief executive of Costain, said that the consortium had won the contract against intense competition. “This is our first contract in Iran in modern times.

“About 150 people will work on the contract there but much of the work will be done from the UK,” he said.

There are likely to be other construction contracts on offer in Iran in the coming months, which Costain has said that it will consider bidding for.

Bid Boland 1 was constructed by Costain in the 1970s, before the Islamic Revolution of 1979. The value of the new contract to Costain is about $300 million.

Costain is also working in northern Iraq, where it is overseeing the building of hospitals, an airport and road systems.

“Since the elections there is more commitment to get things done in this region but we are proceeding with great care,” Mr Doughty said.

The group is rebuilding its international major contract portfolio after a restructuring in 2001. With a long history of working in the Middle East, it has pursued reconstruction contracts in the war-torn areas.

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