MASHHAD -- Minister of Road and Transportation Ahmad Khorram said that the main problem of the road and transportation sector is the lack of sufficient rate of return on investments, IRNA reported.

Speaking at a gathering of provincial Road and Transportation Ministry officials, he added that this is the reason for the private sector's lack of motivation to invest in the sector.

He also declared that any move to rectify the situation to yield higher return will also have a perceptible effect on the sector. Khorram stressed the need for a modernization drive of national road and railroads, adding, "The contract to purchase 350 wagons has been inked, of which 150 will be delivered within a year."

He further said that in a bid to modernize the transportation fleet over Rls.2,000 billion has been earmarked in the current Iranian year (started March 21).

Elsewhere, Khorram said here last week that his ministry is unable to renovate its airline fleet, arguing that a 100 percent rise in the ministry's budget would not suffice to cover the due expenses.

The Persian-language **Javan** newspaper quoted Khorram as stressing the need for an increase in prices of air tickets to ease added burden on the budget.

Khorram said the Transportation Ministry has received $1.5 billion in financial credit to buy new planes for the Iranian aviation fleet, and stressed that building planes in the country would never be economical.

Khorram in April announced that Iran would take delivery of three Airbus passenger planes it bought from France in the current Iranian year.

The aircraft are among 10 Airbuses that Iran has decided to buy to rejuvenate its aging air fleet.

Press in March cited Khorram as saying that an agreement was in the pipeline to purchase 20 second-hand Airbus aircraft.

Iran's aviation fleet is mostly composed of American-made Boeings, purchased before the 1979 Islamic Revolution of Iran.