BAGHDAD, 13 March 2004 — US and British firms have won two contracts worth $1.1 billion to help rebuild Iraq, and Washington will award a final eight major deals to companies from countries that supported the war effort in the coming days, officials said yesterday.
But the dangers of working in the unstable country were again highlighted when one of the winning contractors, US-British joint venture FluorAMEC, revealed that two of its Iraqi staff were shot dead and another was injured late last month.
The US Defence Department late Thursday awarded one contract with a ceiling of $500 million to FluorAMEC to work on Iraq’s patchy electricity sector.
A second contract for public works with a ceiling of $600 million was given to US partnership Washington International Black and Veatch.
The two contracts were the biggest to date from a $5 billion envelope earmarked for construction projects in the war-battered country, said Steven Susens, a spokesman for the Baghdad-based Program Management Office (PMO) that is managing US reconstruction funds in Iraq.
“The announcement for the other primary contracts — worth some $3.8 billion — is expected soon,” Susens said.
On Wednesday, the Pentagon served up seven contracts worth more than $120 million to US and British companies to manage the reconstruction projects in six sectors — electricity, public works, security and justice, transportation and communication, health and education and oil.
It doled out a series of smaller contracts on Monday to Iraqi, Polish and United Arab Emirate firms for housing developments.
The United States has pledged $18.4 billion for reconstruction in Iraq, more than a third of the $55 billion the World Bank estimates will be necessary to get the country back on its feet. But Washington infuriated many countries last year by declaring that primary rebuilding contracts would exclude war opponents such as France and Germany, while primary contractors were free to hand out work to whomever they want.
Special criteria such as technical merits and past experience was used to select the successful applicants for the latest contracts from a combined list of 14 offers, said Bruce Cole, a second PMO spokesman.
“We wanted to have the best people here,” he explained. FluorAMEC will concentrate on helping to fix Iraq’s electricity network, which suffers from daily blackouts. As of Feb. 20, all 18 provinces had 10 hours of electricity per day with some peaking at more than 16. But the death of an Iraqi driver, a female Iraqi interpreter and the wounding of her sister, a second translator, who all worked for the firm and were gunned down in Baghdad on Feb. 24, cast a shadow over FluorAMEC’s celebrations after securing the coveted contract.
“We do not know who did it or why but the local police and I believe the coalition forces are investigating,” said Nick Welsh, a London-based spokesman for the AMEC side of the partnership.
FlourAMEC already has about 100 staff on the ground and plans to increase that number by about 80 as it starts work on the contract amid tight security.
The water deal will focus on repairing Iraq’s water infrastructure, which has suffered due to a combination of war damage and 13 years of international sanctions, and include improving its decrepit sewage system. Cole was unsure how many jobs the two contracts would create, but said the contractors had incentives to employ Iraqi staff and hire local firms.
Washington has said that it aims to create 50,000 jobs across Iraq by July through its rebuilding projects.
The $18.4 billion US fund for Iraq was unveiled with much fanfare in October, but Iraqis say it has had little real impact as unemployment remains high and living standards low. Initially set to last two years, the latest contracts have an option to run for as long as five years if all parties agree, according to Cole.
