Mohammad-Bagher Ghalibaf was elected Tehran mayor in September 2005 after losing to Mahmoud Ahmadi-Nejad in presidential elections. The FT's Najmeh Bozorgmehr interviewed him in his office in Tehran on December 24 in his first interview to the foreign press since taking the post. This is an edited transcript of the interview.

Financial Times: It's over two years you have been in charge of running Tehran. How different is Tehran today from two years ago?

Mohammad-Bagher Ghalibaf: To make a fair judgment of the situation we must remember problems and strong points do not emerge overnight, but in a gradual process.

I can definitely say that development activities from both a financial and physical point of view carried out by the Tehran municipality in the past two years have exceeded all the work of the preceding seven years. We have a specific policy. During these two years, we have not put any development project on hold. We decide on a project and push for its completion.

The most important has been Milad Tower (the world's fourth tallest tower) both in technical terms and the fact that it has been a unique project. This tower has been under construction since 1995. It has cost us a huge amount of money and needed a lot of technical work.

We are going to have a trial opening during the ten-day Fajr Festival [February 1 -11 to mark the 28th anniversary of the victory of Islamic revolution]. You know that such tall towers are not inaugurated all at once. Iranian and foreign tourists can go up the tower from February 1 and see Tehran and from March 20 [Iranian new year] people will be able to use its revolving restaurant. There are three shifts working to complete the tower, 21 hours a day.

FT: How about highways?

A: We extended Hemmat highway, and finished Azadegan highway and Shahid Yasini highway. Azadegan highway was about 10km. Shahid Kazemi is done. Over 3km was added Imam Ali highway at one of the busiest places in Resalat junction.

We established lots of junctions. Seoul junction is done. Chamran-Evin junction will be finished one of these days. Jihad Bridge junction and Shahid Kolahdouz junction are finished.

FT: Does the municipality handle all development projects?

A: Basically, development has been happening at three levels. The first level is local level or neighbourhoods. The first thing I did despite some opposition from [state] organisations was to establish Shora-Yaari, or assisting councils.

This is a good way to achieve social development and people's participation. I personally was interested in this subject and had studied it before, believing that it largely helps efficiency and productivity.

We have divided Tehran into 380 neighbourhoods with defined geography. People have elected their representatives to these councils to take over some development work. The work might be small-scale but is important. This helps people take part [in the city's development] from their doorstep.

A series of medium-scale projects have been carried out by the municipality's representative offices in [22] zones.

The third level is for big projects which are done at national level, like Milad Tower, construction of highways, giant junctions and cultural centres like Azadi Cinema [the original building was burnt down in 1997] over 10,000 square metres of land. Rebuilding the cinema will take less than 18 months and we are going to hold the Fajr Film Festival this year there in co-ordination with the culture ministry.

We made this division of three levels to be able to manage the work more easily.

FT: I see the countdown board on the building, but it doesn't look like being finished in time for the Fajr Film Festival? Isn't the deadline too ambitious?

A: No, we'll finish it. The day I attended the ground-breaking ceremony for the Azadi Cinema, when I said when we planned to open it, Ali Nasirian [a renowned actor] said he had heard such promises a lot and that it was impossible.

I had dinner with Mr Nasirian in Artists House three months ago and he said that he was convinced the cinema would be inaugurated on time and said he was passing by the cinema twice a week to see how the progress was going...

FT: What made you think Tehran needed assisting councils?

A: We have to accept that a mega city like Tehran with this size of population consists of different neighbourhoods. We have to be able to manage well the social, cultural and technical problems and the city's needs. Naturally, we needed to break them down and deal with them at the lowest level...

FT: Where does the municipality's budget come from?

A: The day I came to the municipality, the budget was 992bn tomans ($1.05bn) in total. But this [Iranian] year's budget has reached 3,200bn tomans. It's almost a three-fold increase, and we expect next [Iranian] year's [starting on March 20 2008] to be 5,000bn tomans - a five-fold increase over the budget when I joined the municipality.

FT: How has the budget increased?

A: One part of growth in income has been through encouraging people to pay their taxes. On Eid al-Adha (December 21), we awarded those who had paid their taxes on time and in cash with 22 cars, 1,000 gold coins and loans to encourage people to pay their taxes. People were motivated to pay their taxes thanks partly to our approach towards neighbourhoods. People can see developments on their doorstep, from asphalting to rubbish collection and transportation.

The other part of the budget growth comes from investments. Our investment organisation managed to attract good amount. We had both domestic and foreign participation in this sector, while investors joined the municipality in developing the city.

We defined what the city needed. For instance the city needed hotels, administrative and service centres, public services like cultural centres or parkings. We made the private sector active and handed over all these projects to the private sector. For instance, building parking not only cost us not a single rial, but it even generated some revenue for us. For instance in Yaftabad in Zone 17 [southern Tehran], we opened a car park with a capacity for 2,000 cars with the help of private sector.

FT: So, the municipality spent nothing on all these projects?

A: No, we didn't put up any budget [cash] but we gave assets. For instance, the land belonged to the municipality and we gave permits, while the private sector brought money, making it like a joint project. This increased our capacities....

The other reason for the budget increase was transparency in financial sectors. The municipality's financial system has completely changed.

The law says municipalities should give a report on their income and expenses every six months to people and the city council. Wneh I looked into the files, I couldn't find any record of such a report. The first time was in 1385 [last Iranian year] when we gave a report on income and expenses to the city council and to the people. And in the seventh month of this year, we gave our report about the first six months...

FT: How much budget do you receive from the government?

A: The municipality does not receive any budget from the government for service and development sectors. The government and parliament only help us with public transport as national projects and that budget is about 50 per cent of the total budget for these projects. This means the municipality has to pay for 50 per cent of metro and public transport costs. But even that amount [by the government] is not paid based on a clear plan. It sometimes arrives with delay or does not arrive at all.

FT: Does the government owe to the municipality?

A: The government owes money to us on two fronts. The government like other people has to pay taxes for its buildings, like ministries, because they are inflicting costs on the city. The government doesn't meet this part. The government owes us 500bn tomans in this respect, which in some cases go back to five or seven years ago. Unfortunately, the debts are going up.

The other part is the government's financial commitments to help the municipality like in public transportation. That is also given with delay.

FT: How much is it in the latter?

A: It depends how much the Majlis has obliged them to pay us. For instance, no bus has been given to us because it is usually the government that purchases the buses and hands them over to us.

FT: What percentage of the municipality's revenues is generated through taxes?

A: Unfortunately, there are some problems in the process of generating sustainable revenues. Maybe, about 50 years ago when the municipality was not earning much money, it could meet 45 per cent of its income through taxes. But today the figure stands at less than 5 per cent. Of course I mean renovation taxes [paid annually by housing, commercial and administrative units for the city's development] and not construction taxes. Now, the biggest share of our income is through taxes on construction of housing, administrative and commercial buildings. But we hope taxes on renovation will reach about 15 percent in the future over the next four years.

FT: What percentage of revenues comes from taxes on construction?

A: I can say about 60 per cent.

FT: How much have you attracted foreign investment?

A: Foreign investment has also come from the private sector and not any state sector. We signed contracts worth over 800bn tomans with foreign investors. Two of the main ones have been the Shahr-e Aftab project [which includes hotels, a cultural and recreational centre and shopping centres in south Tehran], another one is Carrefour shopping centre. And regarding renovation of old part of Tehran, the World Bank has agreed to help. There are also three or four projects that we have reached the general agreement and are close to signing contracts, like the second phase of Milad Tower.

FT: But for such a big city, they are not much.

A: It's too little. But in relative terms and considering that four or five years ago even this didn't exist, this is a considerable growth. I agree this is little for such a city.

FT: Are you keen to have more foreign investment?

A: Absolutely. We need both foreign and domestic investment.

FT: In what sectors, foreign investors are welcomed today?

A: In construction of hotels and recreational centres and in recycling. We are currently in intensive talks with Germans, Italians and Austrians over recycling. And the metro is one of the sectors that can definitely attract foreign investment.

Of course under the current political [international] situation [over the country's nuclear programme] some restrictions have been created for investments. But I believe city governments can act outside this atmosphere and continue their talks with other countries and foreign companies. But the atmosphere has created some problems.

FT: Have any of your projects been slowed down due to sanctions?

A: Yes. For instance, we faced some problems for Milad Tower which is a unique project and needed special glass and a special kind of aluminum for the frames. This was part of the reason behind delays as well as banking restrictions. As you know there are difficulties to open letters of credit between banks. Our work is going ahead but with some difficulty.

FT: There are some reports that Tehran is going to have a comprehensive development plan? Can you tell us what kind of plan it is?

A: The last comprehensive plan for Tehran goes back to 40 years ago... But when we look into the past, we see that municipalities and governments before and after the [1979 Islamic] revolution rarely worked to a plan. They were more making temporary decisions...

We collected all the information on such issues like transportation, traffic, service and development projects and urban development. All this together was done intensively and was really a heavy and deep work. Universities helped a lot. There was a debate in the media.

Finally, on November 26 the plan, drafted by the municipality, was approved by Tehran City Council and the Supreme Urban Development Council gave its final approval after holding 30 meetings. The president [Mahmoud Ahmadi-Nejad] took part in two of the sessions. We think as of next year, we can start implementing the plan.

FT: What are the goals in this plan?

A: It has clearly defined different areas of Tehran with regard to the height of buildings. And it has clearly defined the architecture of buildings in Tehran.

If you look at Tehran from here you see there are some high-rises, short buildings and villas without any defined neighbourhood.

[The plan clarifies that] In some areas, the base for built-up area can be 350 per cent and for some areas the base is 180 or 120 per cent meaning villa-like two-story buildings. In downtown or old Tehran, however, we are going to have court yards in the middle of the building. You see now that most buildings are constructed either northward or southward. But in old days, the buildings were around central court yards in Tehran.

The buildings' appearance is considered as part of the city's right. Before, it was defined as citizens' right. It also has plans for transportation, traffic, development projects and services including health and cultural centres.

Tehran becomes smaller in the plan from the current 670 square km to 640 square km. We curbed the city. We do not plan to make Tehran bigger rather to promote its capacities. We plan to be able to give services to 11m people by 1405. But this doesn't mean we are going to attract more people.

FT: For how many people in Tehran there are sufficient services?

A: There are currently between 7 to 7.5m people who both live and work in Tehran. The population at night differs from the number during the day. But there are about 2.5m people who work in the city but do not live here. They live in satellite towns and commute. This means the population is estimated to be around 10 to 10.5m during the day.

The proportion of services to population differs in different sectors of education, water supply and transportation, etc. But on average we can give services to 7.5 to 8m people during the day.

Daily journeys during the day reach 14m if we take into consideration one person reaching his destination and 19m if every single trip is counted.

FT: Do you have figures on the number of immigrants?

A: Population growth in Tehran from birth rate point of view is less than half a percent, which is next to zero. This was confirmed in the census in 2006. But immigration is another kind of population growth. The figure in Tehran is 1.5 percent while it's 3.5 percent in satellite towns.

Of course, this is a problem that mega cities like Paris, London and Tokyo also have. When we look into such issues like traffic, transportation, services like education and cultural and social issues we have to take into consideration the population around Tehran who do have a share in Tehran and get their share. The best example is transportation. If in the mornings you look at Varamin, Islamshahr and Karaj roads, you see they are getting services from Tehran, while they don't live in Tehran.

FT: You referred to some similarities of Tehran with other mega cities. One main problem in such cities is organised crime. How is the situation in Tehran?

A: Considering my background [as police chief] and taking into account the figures, I can tell you that organised crime in Tehran is not comparable with [other] big cities. It's much less, even in satellite towns. Of course, this is rooted in cultural and religious beliefs. This has really helped it to be curbed. I think if it was not thanks to religious beliefs and Islamic sharia, organised crime would have been different.

FT: Do you have any figures on murders?

A: The figures go back to three years ago when I was police chief. It may have changed. But in Tehran less than 120 murders happen over one year. This is not comparable to a city like New York.

FT: A lot of credit is given to Rudolph Giuliani [Former New York Mayor from 1994 to 2001] and Mayor Bloomberg for curbing organised crime there.

A: I want to say we don't have organised crime the way you see in cities like Rome, New York and London. We more have social discrepancies, like family problems, drugs, fighting, divorces and suicide attempts. We in the municipality have concentrated on such subjects....

FT: Do you think recent execution of criminals has helped Tehran's security?

A: I think we have to see it from two points of view. There are some police and controlling moves and some deterrent steps. Police has to deal with those social discrepancies that are creating chaos and are getting out of control. If a thug, for instance, in an area attacks women or men and is guilty of rapes or is after murder and creates insecurity, he has to be dealt with strongly. This may lead to execution.

FT: In you view, does that help security?

A: Definitely it helps. Naturally, when someone is involved in murder, his sentence is execution. This is related to the police and the judiciary.

But we in the municipality look into the reasons. When you see a 23-year-old young man has committed murder, you see for some reasons he has not finished his education and is expelled from school. And then he has not been able to find a job and have a life. Unwillingly and unknowingly he has been taken onto the route of discrepancies. And then he may join mafia-like gangs.

I once talked to the minister of education about their regulation that students should leave school if they cannot pass exams after a couple of years. I said we pay all expenses for those students for you to keep them at school. When a student is expelled it does not mean we have cut off his relations with other students rather we have cut off his relations with the school. When he is abandoned he become professional in discrepancies, learns them and trains other students. This agreement was made when Mr [Morteza] Haji was the minister of education [in the previous reformist government].

Leisure time for Tehranis is extremely important, because life expenses are high and people have two or three jobs and don't have enough time to rest. And when they find the time to rest, there is not a proper place to spend their time. During the past year, we inaugurated 25 cinemas in Tehran. We built the best cinemas in southern Tehran [poorer areas]. It was because of our approach toward social discrepancies that we also inaugurated 500 football pitches. The figure matches the number in many mega cities in the world.

FT: How worried you are about unbalanced development of Tehran, considering that the city does look inharmonious being divided into poor south and affluent north?

A: The comprehensive plan does take that into consideration. It has been impossible during the past two years to inaugurate a plan that does not start from southern Tehran. You cannot find even one case.

An oil depot over a 25-hectar land next to the rail road station caused environmental problems in the middle of the city. We bought it at a huge cost and are constructing the biggest cultural and sports centre in southern Tehran over three years. It will be equivalent to Enghelab Sports Complex [the biggest in northern Tehran] in southern Tehran.

Maybe you have noticed that in southern Tehran green space is speedily increasing. The same is true about cleaning [the streets] and sewage system. Zone 17 was the most vulnerable regarding swage. We have set up sufficient canals to resolve the problem.

FT: There is not much publicity about what Tehran municipality is doing, especially at a time the country's atmosphere is that of populism. Is it your management style not to publicise your work or you are not given enough room for publicity?

A: It is a combination of both. As a matter of principle, I don't believe in populism and fooling the masses. If you look into my background, you don't find such moves. Wherever I've worked, it has been completely principled, logical, scientific and systematic.

Of course, before my entrance into politics, there was not much sensitivity. My good work was appreciated and highly spoken of. Naturally, now that issues have become to some extent political, the good work is, at best, less talked about if not destroyed and not presented negatively. But I've always told my colleagues that the work itself is the best propaganda in people's minds. We may be behind in people's minds in the short run, but we are definitely successful in the long run. For people like us who are religious, this is the right approach both in this world and the afterlife.

FT: In your urban management, is there any city in the world you have taken as your model?

A: In my management, I follow scientific, experimental and comparative approach together. There are currently 40 cities we have chosen and fully monitor their activities both through internet and sending technical teams to have field research and look into all their ideas and work.

FT: What cities are on top of your list?

A: It differs. For instance, we have taken some cities in South America like Brasilia, Bogota and Columbia. In public transportation and BRT [bus rapid transit] they are ahead of Paris. Bugota's bus transportation is definitely the first in the world. We don't think in some other issues they might be behind us.

We monitor Seoul in southeastern Asia, Tokyo in eastern Asia, Beijing, Dubai, Toronto, Vancouver, Karachi and Ankara all for different reasons.

FT: How about European cities?

A: We look at Geneva for environmental reasons. Recently I paid a visit and had a meeting with its mayor. They have worked hard in this issue and have very good models.

FT: What about Dubai?

A: Dubai is studied for its urban development, how it is built and what their methods have been. They have managed to use the world experience in some aspects very well. They give good services over small land. For instance, their per capita garbage is around 5.5 or 6kg, whereas ours is 1.2kg. It is important how they manage it.

We monitor a city like Paris that is very similar to ours for transportation and the cultural buildings, like cinemas, theatres and sports halls.

So, 40 cities are closely and thoroughly being monitored.

FT: Are there any American cities?

A: Yes, New York.

FT: Have you ever visited New York?

A: No, but recently when we were monitoring New York, we noticed there is an Iranian working for New York municipality who is doing a good job. In his visit to Tehran, I spent about two hours with him. We look into New York for its transportation.

FT: Would you like to meet Mayor Bloomberg?

A: Every year, mayors of mega cities get together. In my first year, I attended the gathering in Toronto. But there were political problems over the death of Zahra Kazemi [Iranian-Canadian photographer who died in 2003 in a Tehran prison]. Toronto mayor invited me to go there and he said that the problems between the governments had nothing to do with city governments and that we could follow our own work.

FT: Would you like to meet Mr Bloomberg and go to New York?

A: In the upcoming meeting in Davos mayors of mega cities attend. We are planning and when I go I'll definitely have meetings with some mayors. In the list of guests there are mayors of Seoul and New York.

FT: Mr Guiliani did a lot of work for New York which included petty problems. In a way, what you said about assisting councils follows the model of getting into what may look petty work but in fact they are very important. Is there any mayor in the world you look up on?

A: I don't really follow individuals. I'm not even after structural views. In our country, issues are different and our structure differs. In comparative analysis, I look into their function and completely use their experience and in the real sense localise it.

For instance, about BRT, there were some visiting teams from Germany and France who could not believe how we did all the studies and carried out the plan over eight months.

FT: When I talk to diplomats in Tehran they call you a moderniser, but an authoritarian one. How do you feel about their judgment?

A: It is true that I have a pro-development view toward work and try to employ the world's modern technology. This has been my approach wherever I've worked. And our Islamic culture necessitates using science and technology with whoever it is.

Regarding authoritarianism, it needs clarification to see what they mean by authoritarianism. If it means fanaticism, unilateralism and imposing force, I don't have that spirit. Even when I was the police chief, I didn't behave like that. People felt that police treated them calmly and gently. If I was authoritarian in its unilateralism sense, it should have culminated in the police. This was not seen in me in the police.

But if authoritarianism means when collective sense reaches a plan and decision, I'm very determined and firm in carrying it out, then I belong to this second definition. When the expediency of the society is in carrying a project, then I'm very firm and show little flexibility and don't let that collective sense be marred or disarrayed. And in municipality you see I stand up toughly in some cases when I see elites and experts sit together and reach an agreement for the expediency of the society. It should be done in the time framework set, expenses should be controlled.

FT: Domestically, some labels are used to reflect your tough approach in management. You are described by some as Islamic Reza Shah. How do you feel about that?

A: [Laughing] Reza Shah cannot be Islamic. It's paradoxical. There is one weakness I see in some of our managers which has become like a culture in our society and that is they quickly change their decisions. I think this is because they don't make decisions properly and show flexibility vis-à-vis any problem. There is no stability in their decisions and management. I make decisions late and collectively and then insist on them. This can be called authoritarianism or those who go for political character assassination call it Reza Shah culture or whatever.

FT: So, you see it as character assassination by your opponents?

A: Naturally. Reza Shah is a hated figure with our public opinion.

FT: But his economic work is highly mentioned by people.

A: This is now a political discussion. I don't agree. I have studied this issue very carefully. The railroad stretching from Imam Khomeini port [in southern Iran] to northern Iran is an invaluable work. But did really Reza Shah do it? Was it really our country's need or was it the world's need? Did the then superpowers decide about it in line with their global authoritarianism or our miserable people who didn't have one metre of asphalted road to bring their agricultural products from villages to cities? While people in cities didn't have proper roads and water, what kind of problem the railroad from Tehran to Gorgan could resolve? What kind of problems of our economy or industry were going to be resolved through that railroad?

I don't want to go into details. But only and only from the work point of view, that work over that short period of time certainly had a firm determination behind it. But did that determination benefited the country? Or was it really Reza Shah's decision? I think this is oversimplification.

FT: There are not lots of managers in today's Islamic republic known at least in public as efficient managers. You have got the reputation, even amongst your critics and political rivals, of making considerable progress in any sector you are in charge of. Do you see yourself a phenomenon in management as some describe you?

A: No! When I look at many other people in the world and study their lives and works and even some characters in our own country, they are truly phenomena and distinguished with great records.

Management is to some extent intrinsic and maybe there have been some capacities inside me. But I owe this more to the revolution and Imam [Ayatollah Ruhollah Khomeini, founder of the revolution]. From the age of 19, I got chances to use my talents. If this chance was given to many other young people, they could be even ahead of me.

It is an invaluable experience at the age of 19 and 20 to be in charge of 15,000 people during [Iran-Iraq] war [1980-1988]. This happens to few people.

FT: To what extent that military background has affected your management today?

A: If you remember in [presidential] election time I was described a military man and I said I was not and that I was not interested. I don't have military spirits. At a juncture, our country was invaded. I was one of the many who fought. Management in crisis makes things easy. Harder the work is, better I work. Like a student who is able to resolve sophisticated mathematic problems and not simple ones. I feel I'm like that. Harder the work is, easier I do it.

FT: Is the work really hard now?

A: Almost! I think work is hard from different aspects. This morning we had a meeting on metro development. We are determined to establish 15km of metro every year. This is while 50kms have been set up over 30 years. Tehranis will witness that as of next year 15km are added to their metro lines. This is while there is shortage of money, there is no cement and thousands of problems. Today, metro officials acknowledged all the problems are resolved. We have provided them with all. They were feeling that the municipality had never provided them with so much facility during the past 15 years. This is despite all the problems.

FT: I have heard you spend a lot of time to deal with marginal issues.

A: That is true. This is a weakness. One of the important problems of our country is management and executive issues are fundamentally tied up with political issues. And it's absolutely wrong. Absolutely wrong. Why technical issues and management issues are poisoned with political issues? People want us to build metro and we have to do it. We can even benefit from it politically. Good service is the biggest political work.

You mentioned someone [Mr Guiliani] who I don't want to mention his name in X city [New York] was successful and started from petty work. For instance, the government in Turkey came to power following good work in Istanbul. So, they are politically benefiting. If we do good work, we can politically benefit. No one is against it. But sometimes we don't let good work be done and don't let competition atmosphere to come to management sector to serve [people]. The political and power atmosphere is dragged into non-sense, illogical and baseless issues.

FT: Do you see political immaturity in this?

A: No, Maybe, this is rooted in political complication by some who want to do things in a short period of time. The concept of democracy and people's role has been faint in our 2,000 or 3,000 years of history. This is what we owe to the revolution which has given the chance in the real sense of the word to people. I am one of the very blatant examples of it.

I was not from a wealthy family to come to power because of my wealth. I did not have a cultural or aristocratic background. I was from a lower middle class family from a village 18km from Mashhad. And I didn't have any political affiliations with any party or group. Even now it is clear I'm not connected to anyone. The fact that this chance is given to someone like me shows there is democracy.

FT: Tehran mayors have had different fates from this office. Mr Gholam-Hossein Karbaschi [Tehran mayor between 1988-1998] ended up in Jail while Mr Ahmadi-Nejad [Tehran mayor between 2003-2005] became president. Which one do you think will be your fate?

A: I've been asked this question many times. I have a general analysis about it. Tehran mayors before and after the revolution are divided into two groups. I think there is not a third group. One group is inefficient mayors. They come, they don't work and nothing happens to them. But any mayor who has been here and has done a serious job has left this building following a good or bad incident. I think anyone who works well here will face one of the two fates, good or bad.

FT: Aren't you worried about a bad fate?

A: Not at all. In my life, I've always faced incidents.

FT: So, you think it will be a good fate?

A: No, that's not the way I look at life. One student asked me in Sharif University things like 'you are exceptional and so on and tell me how you planned it and how I can be successful like you?' I said my first plan was to go to war front to die but I didn't die. I told him that it was not clear what his fate could be if he wanted to make plans like me.

FT: Will you run for presidency?

A: I think I said my last words.

FT: Do you still fly?

A: Yesterday I had four flights after 43 days. Whenever I have time I fly mainly domestically. Yesterday was Tehran-Bushehr-Tehran and Tehran-Urumiyeh-Tehran.