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Contractors head for Iraq as army exits

Industry leaders are visiting Iraq to see what opportunities there may be in the country’s reconstruction. By Mark Lewis

As British servicemen prepare to leave the deserts of Iraq, civilian contractors will increasingly arrive to replace them.

That’s the hope, at least, of the UK government. Almost by way of proving that Iraq is fit to fend for itself, UK Trade and Investment, the export branch of the Business department, has stepped up its efforts to secure Iraqi contracts for British firms.

Security remains a concern but the British government is comfortable enough with the improving situation to declare Iraq open for business.

If the tactic is to be judged by the increasingly benign security situation it must be seen as more than a dangerous government wheeze which puts contractors’ staff at risk.

And UK businesses, which have seen private contracts, and now fear post-budget public work will go the same way, should assess the feasibility of securing contracts in the former war zone.

Judging by the size of the firms which joined Peter Mandelson, the Business Secretary on a UK trade mission to Iraq last month, initial representatives will be at the bigger end of the company scale. But the additional work which filters down should create opportunities for contractors a long way down the value chain.

With $45.8 billion of projects still to be procured, mostly through government agencies, firms which took an interest in Mandelson’s trade mission and the reciprocated mission to London later in the month, may find themselves with a head start. But UKTI is keen to stress that opportunities remain.

Some 250 representatives from UK firms joined an Iraqi delegation, including Prime Minister Nouri al-Maliki, at a reciprocal gathering in London on April 30, which went some way to cementing the types of relationships which UKTI officials say are essential in nailing those $45.8 billion worth of Iraqi contracts.

Colin Foreman, MEED Middle East bureau chief, said the mooted figures were compiled at the end of last year before the clouds on the skyline became heavier.

But, shorn of some of the more “ambitious” projects, the bulk of the building work was still likely to go ahead. “Abu Dhabi contractor Mabar’s golf range is probably likely to be a non-starter, but sensible housing schemes and most of the infrastructure work is still likely to happen,” he said.

For those UK contractors who based their Middle East business plans around reshaping war battered-Iraq into a leisure Mecca, this constitutes bad news. For the bulk of contractors it is a market which is worth exploring.

Key Iraqi departments

Key Iraqi departments and sectors for reconstruction, according to UKTI

  • Water Irrigation/drainage secondary and tertiary systems are in disrepair. Water treatment plants are needed throughout the country.
  • Roads The country’s 45,000 km of roads have fallen into disrepair, and little work has so far been done to repair them.
  • Rail There are 2,405 km of track and between 115 and 200 stations in Iraq. A state of the art communications system is not matched by the physical state of the infrastructure.
  • Aviation There are plans for a modern runway and terminal at Irbil airport and an expansion at Najaf airport to support flights to Najaf and Karbala.
  • Ports/maritime Umm Qasr North and South ports will both require extensive work to make them
    modern ports.

Areas of co-operation

Key areas of co-operation between UK contractors and Iraqi departments according to a Memorandum of Understanding signed by Peter Mandelson, the Business Secretary and Barham Salih, the Iraqi deputy Prime Minister on April 30

Co-operation will take place in the following areas:

  1. Investment;
  2. Banking and other Financial Services;
  3. Information & Communication Technology;
  4. Environment, Power and Water;
  5. Oil & Gas;
  6. Transport (including Airports, Railways & Ports);
  7. Life Sciences and Healthcare;
  8. Education and Skills;
  9. Manufacturing;
  10. Construction, Housing  and Infrastructure;
  11. Defence and Security Equipment and Systems
  12. Public and Government Services.
  13. Such other areas of economic, technical and professional co-operation as shall be determined to by the two Parties.

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