BAGHDAD, 19 June 2003 — The United States will award at least half the contracts to help rebuild Iraq to local firms, a US official said here yesterday, but Iraqis fear tough requirements will force them to share their part of the cake with foreign partners.
“At least half of the $680 million will go to Iraqi companies, with Iraqi employees,” Andrew Natsios, administrator of the US Agency for International Development (USAID), told a conference attended by more than 600 Iraqi businessmen.
“We never spent so much money in one country in one year since the Marshall Plan for the reconstruction of Europe after World War II,” said Natsios after arriving in Baghdad from a two-day visit to the southern city of Basra. USAID chose the San Francisco-based Bechtel to handle a contract worth up to $680 million over the next 18 months to rehabilitate the shattered infrastructure of war-scarred Iraq.
Natsios said USAID was awarded $1.1 billion tapped from US taxpayers’ money to help rebuild Iraq from the $2.4 billion promised by the US presidential supplementary budget for the reconstruction of the country.
Apart from Bechtel’s deal a number of other contracts, each worth about $50 million, will help rehabilitate schools, hospitals, clinics, agricultural projects and local government buildings in Iraq, he said.
“There will be an appreciative improvement and a rapid scale-up of things in the next two months” in Iraq, vowed Natsios.
Cliff Mumm, senior vice president and program director for the USAID Iraq infrastructure reconstruction program, said “Bechtel is absolutely committed to work with Iraqis and we know Iraqis can build Iraq.” Mumm said among the obstacles were the non-existence of a proper insurance market and the lack of cash money as the companies will insist on working with advance payments.
“I have not resolved those issues with USAID yet...but I believe we will get them resolved because we want our bid list to be inclusive of everyone,” he said.
The conference was meant to ask interested Iraqi businessmen to fill up detailed forms about their companies to help Bechtel choose Iraqi subcontractors for the planned infrastructure projects. But like many of the Iraqi contractors and suppliers at the gathering, Ghassan Kubba, major owner of the Credit Bank of Iraq, was apprehensive.
“I am sure not a single Iraqi company can meet the requirements, especially concerning safety regulations, quality control and the ISO 9001” international standard compliance, he said. “It will also be very difficult for Iraqi firms to state their net worth and other accounting data because they are not used to do so, or get banking guarantees, letters of credit,” he said.
Kubba said he has so far been contacted by several major Saudi, Lebanese and Jordanian companies seeking to strike a partnership with him for the Bechtel contracts. “They cannot enter the bids without me and I am not sure to be able to fit the requirements, so we will form a joint company to carry out the project,” he said.
Another businessman who owns an information technology company said: “We were glad to hear such a commitment by the Americans to work with the Iraqis. We think the Americans have to work with us because nobody knows Iraq like the Iraqis and we have excellent businessmen and technicians. “As for us, we have been out of business since the war so we are here today because we have to, not because we really like to,” said the US-educated Iraqi engineer, who requested anonymity.
“We feel the Americans are running Iraq like a company, but we are leaving emotions out because there is nothing we could do at this point. We are helpless. Either we go along or we lose everything we have,” he said.
Meanwhile, Turkey closed its main border crossing with northern Iraq to commercial traffic yesterday, but officials gave no clear reason for the move. The Habur border crossing was shut to all vehicles except those on official United Nations business or those supplying US forces based in northern Iraq, officials said, adding they were acting on an order issued from Ankara late on Tuesday.
