TEHRAN (Fars News Agency)- An Iranian firm has won a $1.5 billion contract to build a new town in the southern city of Basra, Hayder Ali, the head of Basra Investment Commission said.

The town will include 5,000 housing units as well as modern amenities like schools, markets, parks and health facilities, he said.

It is Iran's largest construction contract in Iraq since the 2003-US invasion and signals Tehran's economic arm in a country that is practically still ruled by its nemesis, Washington.

News of the massive contract comes only a few days after a landmark visit by Iranian Foreign Minister Manouchehr Mottaki to Baghdad during which the countries were reported to have drawn a roadmap to boost trade exchange value to $5 billion.

Iran has expanded its diplomatic reach in Iraq. Besides its embassy in Baghdad, it now has diplomats offering consular services in at least four other cities.

The new town will have all the facilities of a modern city, Ali said.

He said there will be a supermarket, 2,000 commercial shops as well as annexes offering different services.

Iranian construction firms are active in several places in Iraq and currently dominate the country's building projects.

Iraqis are said to be very fond of their designs and luxurious styles, particularly the newly rich in northern Iraq.

Flats built by Iranian firms in the Kurdish north are said to cost up to $250,000.

... Payvand News - 02/18/09 ... --