Mehdi Chamran, the head of the Tehran City Council, has defended a secretive two-billion-euro contract with a Chinese construction company for the purchase of electric buses.

Chamran said on Sunday that the details of the agreement were “confidential and its disclosure poses a security issue.”

He also claimed that the contract was executed under the supervision of the Ministry of Foreign Affairs and the Central Bank. Chamran claimed that a similar contract was in place in 2017, suggesting that such dealings were not uncommon.

However, recent reports highlight growing concerns and criticism from city council members about the municipality's clandestine agreements with the Chinese company, aimed at importing transport and traffic surveillance equipment, among other items.

The contract, signed by Mayor Alireza Zakani, is expected to be funded by the proceeds from Iran's oil exports to China and the accumulated money there amid US sanctions.

During a January visit to China, Zakani confirmed that he had signed several agreements, including a 1.67 million euro deal in the transportation sector. Items listed in the deal include electric buses, vans, taxis, subway cars, and traffic cameras. Despite the disclosures, detailed specifics of the contract remain undisclosed, prompting urgent calls for transparency from Tehran city councilors and the media.

The financing of the contract has also raised eyebrows. Tehran's city government lacks direct access to substantial hard currency, which is typically controlled by the state. It is speculated that the Supreme Leader Ali Khamenei's office may have authorized the project.

Adding to the controversy, whistle-blower Yashar Soltani recently revealed on his website that the Chinese company tasked with importing public transport vehicles to Tehran is relatively new, established only in 2010, and highlighted "numerous violations" in the agreement with Tehran Municipality.