The Story Behind the 'Water Mafia’ 

The contractors profited, but the label also served as a shield for a deeper state project.  

After years of dam building and water-transfer projects, water disputes in Iran are no longer confined to policy papers and provincial budgets. In parts of the country, they have become open confrontations among communities. 

More may lie ahead. From the Caspian provinces of Mazandaran and Golestan to Semnan in central Iran and the western belt of Hamedan, Kordestan, Kermanshah, Zanjan, and West Azarbaijan, projects that began receiving budget allocations after 2021 carry the potential to spark further regional conflict. 

Those projects had beneficiaries. Contractors such as Khatam al-Anbiya, the Islamic Revolutionary Guard Corps’ powerful engineering arm, and Jihad Nasr, a sprawling contracting network long associated with reformist-era managers, profited from them, feeding what is often described in Iran as a “water mafia.” 

But that phrase explains only part of the story. 

In many ways, the idea of a “water mafia” has served as a shield, absorbing public anger while deflecting attention from a deeper reality: Iran’s water crisis was rooted in the Islamic Republic’s governing doctrine long before contractors became its most visible beneficiaries. 

That doctrine appeared almost immediately after the 1979 revolution. In November 1979, less than a year after the fall of the monarchy, Ruhollah Khomeini, the founder of the Islamic Republic, addressed the prospect of US sanctions in a meeting with the Pope’s envoy by saying: “We will economize on the barley and wheat that we ourselves grow in our own country, and that much is enough for us.” 

The same thinking was written into the new state’s founding framework. The constitution approved that same month, in Article 43, Clause 9, emphasizes expanding agricultural and livestock production to achieve self-sufficiency. 

Under Ali Khamenei, who became Supreme Leader in 1989, that principle remained central. Agricultural self-sufficiency was one of the themes he emphasized both in his opening message as the Islamic Republic’s new leader in June 1989 and again in a speech the following month. He returned to it repeatedly in the decades that followed. 

One of the new parliament’s earliest major steps was to pass the Just Distribution of Water Law, legislation that would become the legal foundation for the extraction, allocation, and transfer projects that followed. Over time, that framework helped sustain the same contractor networks later blamed as the “water mafia.” 

Iran’s water crisis, then, did not begin with a mafia. It began with a governing vision: a state determined to pursue self-sufficiency in a dry country, then build the legal, financial, and engineering machinery to enforce it. 

Iranian officials often describe the sharp rise in agricultural production after the 1979 revolution as the result of modernization rather than a major expansion of cultivated land.

In 2024, for example, Akbar Fat’hi, the Agriculture Ministry’s deputy for planning and economic affairs, said agricultural production had risen compared with the Pahlavi era without any expansion in cultivated area.

But official statistics point in a different direction.

According to data published by the Statistical Center of Iran, total irrigated cultivated land nationwide stood at about 3 million hectares in 1978. By 2014, that figure had risen to about 4.8 million hectares. The latest agricultural census, published in 2024, shows it had reached 5.4 million hectares.

That means Iran’s irrigated cultivated area in 2024 was close to double its level before the revolution. And it kept expanding even as water stress worsened across the country.

Comparisons across provinces are complicated by repeated changes in Iran’s provincial boundaries over the past half century. But once the newer provinces are adjusted back into their earlier units, the pattern is clear.

The sharpest increases in irrigated cultivated land were concentrated in provinces such as Hormozgan, Bushehr, Khuzestan, and Kerman. Some provinces, including Gilan and Kohgiluyeh and Boyer-Ahmad, saw declines, while Isfahan and the broader Khorasan region recorded much smaller increases than public debate often suggests.

That expansion matters because irrigated agriculture is inherently water-intensive. In a dry country, expanding it on this scale means drawing more heavily on rivers, reservoirs, aquifers, and, eventually, long-distance transfer projects.

Cheap Jobs, Costly Water 

Subsidized water did not just grow crops. It underwrote livelihoods and functioned as a political subsidy.

According to the 2024 agricultural census, Iran has 4.329 million agricultural operators nationwide. That is more than twice the number of all government salaried workers in the country and roughly equal to the entire salaried workforce in the formal state employment system.

That scale helps explain why the Islamic Republic kept expanding water-intensive agriculture even as the environmental costs became harder to ignore.

The case of Kerman is especially revealing. The province has no permanent river and depends heavily on groundwater, yet it has the highest number of agricultural operators in the country.

Mohammad Nayeb-Yazdi, a project manager and water-resources engineer with the Office of Sustainability and Environmental Management in Arlington, Virginia, told Iran International that the state has effectively used cheap water to create cheap jobs in agriculture. In his view, the government not only supplies underpriced water, but also uses that water to keep rural livelihoods dependent on state allocation.

Mehdi Ketabchi, a water specialist trained at the University of Maryland and now a water-resources consultant in Maryland’s state government, told Iran International that the Islamic Republic has kept farmers afloat through a deeply distorted cycle. Referring to desalination and water-transfer projects designed to preserve an unsustainable agricultural model, he said: “The Islamic Republic even spends the resources it earns from oil sales to keep this condition going.”

For Ketabchi, the problem goes well beyond contractor greed. “I consider the current situation territorial plunder, not the work of a water mafia; it is plunder driven by the structural challenges of the system governing Iran,” he said.

He added that the issue is not merely social. It is also political and security-related. “If you cannot get water to the farmer, the issue can become a security problem for the Islamic Republic,” he said.

That helps explain why so many uneconomic water projects remain politically attractive. For the state, water is not just a natural resource or an agricultural input. It is also a political subsidy – a way to support employment, manage discontent, and delay deeper economic change.

The Desalination Mirage 

In a country where agriculture still consumes the overwhelming share of water, desalination can look less like a solution than a very expensive detour.

Iranian officials and institutions publish sharply different estimates of the country’s renewable water resources. International sources such as the World Bank put the figure at around 129 billion cubic meters a year, rising to roughly 137 billion cubic meters if inflows from outside the country are included. But in December 2025, Iran’s state Water and Wastewater Engineering Company put the figure at 66 billion cubic meters, while parliament’s Development Committee put it at 90 billion cubic meters the previous month.

Whatever the true figure, specialists interviewed for this report argue that Iran’s problem is not simply that it has too little water in absolute terms. It is that the state has chosen to use most of it in deeply inefficient ways.

More than 90 percent of Iran’s water is consumed in traditional agriculture. Yet the government continues to spend heavily on desalination and long-distance transfer schemes.

Shirin Goli, an environmental engineer and member of the Iran Prosperity Project, told Iran International that countries such as the United Arab Emirates and Israel, which have far fewer renewable water resources, rely on desalination largely because they have little alternative, and mainly for drinking water. “Iran’s problem is not water scarcity itself, but mismanagement and wrong policies,” she said. “If those policies are corrected, there is no need for costly and irrational transfer and desalination projects.”

She described desalination for agriculture as highly unusual. “Desalinating water for agriculture is completely abnormal and remains on the table only because energy is subsidized,” she said.

Goli also questioned the economics of the state’s current transfer plans. Why, she asked, should Iran spend $5 to $8 per cubic meter to move desalinated water from the Persian Gulf to Isfahan, or from the Sea of Oman toward Khorasan, instead of curbing over-extraction from aquifers or allowing a more rational water market inside agriculture?

As long as the state continues to subsidize both energy and water, projects like these can remain politically attractive even when they make little environmental or economic sense.

Nasser Karami, a climatologist and environmental journalist, told Iran International that both of the Islamic Republic’s leaders – Ruhollah Khomeini and Ali Khamenei – pursued food self-sufficiency much like authoritarian rulers elsewhere who sought insulation from the outside world. In his view, the leadership long expected confrontation and treated food production as a strategic priority.

That priority was especially clear in wheat. Mahmoud Hojjati, the reformist politician who served as agriculture minister under Mohammad Khatami and later Hassan Rouhani, pushed aggressively for wheat self-sufficiency. In 2001, Khamenei said during a meeting with the cabinet that Hojjati had promised him self-sufficiency in staple foods.

The numbers show how much water that ambition consumed. Before the 1979 revolution, irrigated wheat covered about 1.5 million hectares. By 2024, it had reached about 2.6 million hectares.

Pistachios tell a similar story from another corner of Iran’s agricultural economy. The expansion in Kerman began in the early years of the Islamic Republic. In a parliamentary session in May 1982, then energy minister Hassan Ghafouri-Fard warned that wealthy pistachio growers in Rafsanjan, in Kerman province, had taken advantage of the post-revolution push to expand agriculture by drilling wells, worsening the region’s water shortage.

Since then, the pistachio economy has expanded dramatically, with the number of productive trees rising far faster than output. The result has been a sharp increase in water use for a crop closely tied to export income and to the economic influence of wealthy growers, particularly in Kerman.

In Kerman, the center of Iran’s pistachio industry, the number of productive pistachio trees rose from around 10 million before the revolution to roughly 270 million in 2024. Nationwide, the figure climbed from around 10.6 million to 530.6 million.

Even more striking, the growth in trees far outpaced the growth in production. Based on available figures, productive pistachio trees increased by roughly 2,540 percent, while dry pistachio production rose by only about 460 percent.

On average, producing one ton of dry pistachios in Iran consumes about 5,760 cubic meters of water. By that measure, water use for pistachio production rose from roughly 230 million cubic meters before the revolution to about 1.3 billion cubic meters today.

Sugarcane offers another example. In Khuzestan, large sugarcane plantations and related industries have become central to the region’s water use. Specialists interviewed for this report said the water consumed by crops such as sugarcane and pistachios can be comparable in scale to the country’s entire drinking-water demand.

Taken together, these cases point to a central conclusion. Iran’s water crisis is not just a story of scarcity. It is also the result of what the state chose to grow, where it chose to grow it, and how much water it was willing to spend to sustain those choices.

The Convenient Villains 

Public debate often fixates on the wrong crops, obscuring the larger structure of overuse.

In recent years, Isfahan has become one of the most visible symbols of Iran’s water crisis. The drying of the Zayanderud River, the largest river on Iran’s central plateau, and the bitter debate over agriculture in the province have turned it into a focal point of public anger. But on paper, Isfahan’s irrigated cultivated area did not expand dramatically over the past half century.

Because provincial boundaries changed relatively little there, Isfahan is easier to compare over time than many other provinces. In 1978, its irrigated cultivated area stood at 139,000 hectares. By 2014, it had slipped slightly to 138,000 hectares. In 2024, it rose to a little over 152,000 hectares – an increase of roughly 10 percent compared with 1978.

The neighboring province of Yazd presents a different picture. Its irrigated cultivated area rose from about 8,000 hectares in 1978 to more than 21,000 hectares in 2014, before falling back to about 16,000 hectares in 2024. Roughly half of Yazd’s irrigated cultivated area is planted with wheat, followed by barley and alfalfa.

That matters because the public conversation often gravitates toward more symbolic targets. One of them is watermelon. Across Iran, about 47,800 hectares of land are planted with watermelon. But watermelon is not among the country’s most water-intensive crops. Estimated total water use for watermelon cultivation is around 240 million cubic meters – far lower than the water devoted to staples such as wheat, or to intensive orchard crops and sugarcane.

Mohammad Nayeb-Yazdi says that the repeated focus on watermelon serves as a distraction. “They magnify the issue of watermelon cultivation so that public opinion does not pay attention to grains, wheat, sugar beet and other crops that consume far more water,” he said.

Rice in Isfahan has also become a familiar target in public debate, but it is not unique to the province. Isfahan has a little more than 3,000 hectares under rice, consuming an estimated 37 million cubic meters of water. Yet rice is also cultivated in non-northern provinces such as Razavi Khorasan, Fars, and Qazvin, all of which face their own water stress.

The point is not that watermelon or rice are irrelevant. It is that public anger is often steered toward crops that are easy to mock, rather than toward the larger policy choices that pushed water use upward across the country.

The Law That Changed Water 

The crisis was not shaped by projects alone. It was also built into the legal order that followed the revolution.

The Just Distribution of Water Law was first introduced in parliament in the winter of 1981. Its original drafters remain unclear. By March 1982, lawmakers said the text had been finalized after 19 meetings involving deputy ministers and representatives from the Energy Ministry, along with members of parliamentary committees on energy, agriculture, and judicial affairs.

The law was eventually approved after 12 parliamentary sessions held across May, June, October, and March 1982. With later amendments, it still forms the basis of water governance in Iran.

The debates around it reveal much about the political atmosphere of the time. Religious reasoning often dominated. In one session, a lawmaker argued against requiring ministry permission for groundwater extraction, citing Khomeini’s jurisprudential writings and saying such water should be treated as part of the shared resources of the Islamic order. Another suggested that only the wealthy should need permits, while poorer users should be free to draw groundwater without them.

The law was passed in part to end the disorder that followed the revolution, when Khomeini’s push to expand agriculture, combined with local committees and ad hoc permits, had led to widespread and chaotic extraction. But in trying to impose order, the state also concentrated extraordinary power over water in its own hands.

The Consultants Who Justified the Projects 

The same ecosystem that studied water projects often helped legitimize, supervise, and sustain them. 

Roughly six months after the Just Distribution of Water Law was passed, a firm called Mahab Ghodss Consulting Engineers was established. It appeared private, but in practice functioned as an arm of the Energy Ministry. It remains active today, and specialists often describe it as part of the same ecosystem commonly labeled the “water mafia.”

Mahab Ghodss played a critical role in the mega-project era. In a country with more than 1,000 dams, of which roughly 200 are generally considered major dams, the company carried out studies for about 200 and supervised around 50. It was also active in water-transfer, road, and rail projects.

That position gave it enormous influence. As project consultant, Mahab Ghodss could help justify the projects the state wanted built. Its managers also appeared in corruption cases. Nasser Tarkeshdouz, the company’s former chief executive during the presidency of Mahmoud Ahmadinejad, was accused of involvement in the discounted transfer of the firm to Astan Qods Razavi, the powerful Mashhad-based foundation that manages the Imam Reza shrine and holds vast business assets. That transfer was later overturned by court order during Rouhani’s first term, and the shares were returned to the Energy Ministry.

One of the clearest examples of Mahab Ghodss’s role is the Gotvand dam. The company studied the project. When the reservoir was later filled on the Karun River, salt layers in the reservoir area contributed to severe environmental damage downstream.

Ketabchi argued that the studies behind most of Iran’s major dams were conducted without financial transparency or clear environmental evaluation. He said the core problem was institutional.

“A massive intertwined structure exists inside the Energy Ministry that writes the rules itself, supervises projects itself, and says who should execute them,” he told Iran International. In many other countries, he said, those functions are deliberately separated to prevent conflicts of interest.

Another major consulting firm, Jamab, which has long conducted extensive studies on water projects, moved into Jihad Nasr’s orbit in 2010, when Jihad Nasr-affiliated companies entered its board. Mahab Ghodss also served as a consultant on Jihad Nasr projects.

In effect, the same ecosystem that studied and justified mega-projects often maintained formal or informal ties to the contractors that later profited from them.

Jihad Nasr 

Long overshadowed by the IRGC’s better-known construction arm, Jihad Nasr became a major force in dams, transfers, and the infrastructure of agricultural expansion. 

Much has been written about Khatam al-Anbiya, the IRGC’s engineering giant, and its role in the Islamic Republic’s mega-projects. But a parallel contracting network, Jihad Nasr, operated inside the same system before Khatam became dominant.

Jihad Nasr was more closely aligned with the Islamic Republic’s reformist camp and was strongly backed by Mahmoud Hojjati, the long-serving agriculture minister under Mohammad Khatami and later Hassan Rouhani. Some observers, including Karami, believe one reason former president Mahmoud Ahmadinejad allowed Khatam al-Anbiya to expand so aggressively was to weaken Jihad Nasr’s position.

Over time, Jihad Nasr helped produce a whole managerial class of former “jihadists” from the war and post-war years. It later moved into a nominally private form under a holding company called Talashgaran Eghtesad Paydar, and now encompasses at least 170 main companies.

Iran International examined nearly 1,500 domestic and foreign projects carried out by 37 of those companies. In water, Jihad Nasr played a role similar to Khatam’s, particularly in dam building, water-transfer schemes, and related infrastructure.

Its most significant water project is the reclamation of 550,000 hectares of land in Khuzestan and Ilam – a mega-project made up of hundreds of sub-projects and still unfinished.

The point is not simply that another contractor existed alongside Khatam. It is that the “water mafia” was never a single contractor or faction. It was an ecosystem of state-backed consultants, para-state firms, and politically connected project networks that helped design, justify, and carry out the same model of extraction.

Water, Tunnels, and the IRGC 

The boundary between civilian infrastructure and the security state was often thinner than it appeared. 

Khatam al-Anbiya is often described as a giant military contractor that later moved into water projects. But the deeper story is more entangled.

Khatam was established in 1989, the same year Ali Khamenei became Supreme Leader and Akbar Hashemi Rafsanjani became president. Around the same time, the IRGC also created its Self-Sufficiency Jihad, a body that played a central role in building the Islamic Republic’s missile program.

Khatam’s role, however, extended beyond military infrastructure. It worked closely with Jihad Nasr and other contractors on civil engineering projects, including large water-transfer schemes.

One of the clearest examples of that overlap is Amir Ali Hajizadeh, the late commander of the IRGC Aerospace Force, best known for his role in Iran’s missile program. According to the reporting and interviews for this project, Hajizadeh was also involved in major water-transfer and metro projects.

The connection was not incidental. The IRGC builds tunnel-based missile depots it calls “missile cities.” Water-transfer systems and metro networks also depend on large-scale tunneling. In practice, the engineering capacities behind military and civilian infrastructure could reinforce one another.

Hajizadeh oversaw the Qomrud and Garmsiri water-transfer projects. Jihad Nasr affiliates such as Jamab worked on sub-projects and studies for Qomrud, and Mahab Ghodss was also involved. The Garmsiri scheme, one of the largest water-and-soil projects in the history of the Islamic Republic, was largely awarded to Jihad Nasr, with dozens of its affiliate firms taking part.

Hajizadeh also oversaw large parts of the expansion of the Tehran Metro during the years it was run by Mohsen Hashemi, son of former president Akbar Hashemi Rafsanjani. During that period, giant TBM tunneling machines were imported under the pretext of metro construction, and technicians were sent abroad for training. In the context of this investigation, that detail matters because it links water-transfer tunnels, urban infrastructure, and the engineering capacities that also served the security state.

When the Guards Moved In 

As sanctions deepened, Khatam al-Anbiya expanded from participant to dominant broker in the project economy. 

During Mahmoud Ahmadinejad’s second term, as international sanctions intensified and foreign contractors withdrew from major projects, Khatam al-Anbiya stepped into the gap, especially in energy and infrastructure.

The conglomerate now operates through six major subsidiaries and, with them, more than 800 companies and institutions. Ketabchi described it as a “major water broker,” arguing that one of Khatam’s central roles is not only to execute projects but also to broker them, passing work down to smaller subcontractors that are not always formally tied to the IRGC.

In dam construction, Khatam’s best-known subsidiary is Sepasad. In water and wastewater, it has also operated through firms and institutions such as Nirugostar, Samavat, Fater, Fajr, Hara, and Sarallah. Based on publicly available information, at least 174 mega-projects can be identified across the network.

More than 40 of those appear to be water-transfer mega-projects, including the Ghadir water-supply scheme and transfer lines from the Persian Gulf to Yazd and from the Sea of Oman to Zahedan, many of them linked to desalination plans. Khatam has also built hundreds of dams, with 25 classified at the national level, including major projects such as Karkheh, Gotvand, Sardasht, and Dalaki.

By the time public anger began to gather around the phrase “water mafia,” the system was already far larger than any one contractor. It included state-backed consultants, civilian contractors, reformist-era networks, and a powerful IRGC engineering machine that had moved to the center of the project economy.

Potential and actual conflicts and unrest in the country over water 

People Against People 

The end result of this model was not just depletion. It was conflict: province against province, city against hinterland, farmer against farmer. 

The expansion of irrigated cultivation and land-reclamation projects required dams, tunnels, pumping stations, and long-distance water transfers. Those projects, in turn, created new lines of conflict between provinces and communities. Some have already erupted into open confrontation. Others remain latent.

Isfahan has become one of the main centers of conflict in central Iran. The Zayanderud River runs through the province, but its waters rise in the mountains of Chaharmahal and Bakhtiari. That province is also a source of the Karun and Dez rivers, tying Khuzestan to the same struggle.

The result is a chain of tension stretching from the headwaters in Chaharmahal and Bakhtiari to Isfahan in the center, then onward to Yazd and Kerman, which receive transferred water, and to Khuzestan, which fears losing flows downstream.

Projects such as Kouhrang 3, Beheshtabad, and Golab have sharpened those tensions. Residents of Shahrekord, the provincial capital of Chaharmahal and Bakhtiari, have protested the diversion of water to other provinces, while farmers in Isfahan have repeatedly gathered in the dry bed of the Zayanderud.

The Kouhrang 3 project, launched in 2010, was designed to transfer water from Biregan in Chaharmahal and Bakhtiari to Isfahan. It also caused serious environmental damage. In one case, faulty drilling dried up Morvarid Spring, which had previously discharged 1,200 liters per second.

The Beheshtabad project, first advanced in 2005, is designed to move water through a 65-kilometer tunnel from Chaharmahal and Bakhtiari to Isfahan, Yazd, and Kerman. Much of its implementation moved forward during Hassan Rouhani’s presidency. Residents of Chaharmahal and Bakhtiari have staged dozens of protests against it.

The Golab transfer scheme, also in the Zayanderud basin, was initially presented as a way to supply drinking water to Kashan, Aran, and Bidgol. But its design capacity far exceeds those stated drinking-water needs, and because of its links to Beheshtabad, it became another source of public suspicion and political conflict.

One of the central grievances in these disputes is that water is often transferred in the name of drinking water, while the recipient provinces continue to see growth in irrigated agriculture, mining, and industry.

The tension has already turned physical. Farmers in Isfahan have attacked pumping stations that send water to Yazd, and the authorities have responded with security forces.