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Iraq: Companies Vie For Reconstruction Contracts At Regional Fairs

  • Charles Recknagel

U.S. officials in charge of reconstructing Iraq have just concluded a conference in Jordan attended by hundreds of foreign and Iraqi businessmen intent on winning contracts. RFE/RL correspondent Charles Recknagel reports that the three-day conference emphasized opportunities in Iraq as the U.S. prepares to spend some $18 billion on reconstruction projects in the next few years.

Prague, 14 January 2004 (RFE/RL) -- A just-concluded conference in Jordan -- "Outreach 2004" -- is the latest in a series of gatherings for foreign businessmen eager to win U.S. contracts for reconstruction work in Iraq.

So far, all the conferences have been held in states near to Iraq -- principally Jordan and Kuwait -- but not inside the country itself. Many of the foreign entrepreneurs vying for work remain hesitant to visit Iraq due to security concerns.

The gatherings in Amman or Kuwait City offer a chance for company representatives to meet with officials of the U.S.-led Coalition Provisional Authority (CPA) and with Iraqi businessmen, who take long car rides across the border for the purpose.

All three parties have something they hope will interest the others. The CPA has $18.6 billion to disburse over the coming few years. The foreign companies have the resources to undertake major projects. And the Iraqi businessmen have the local partners and labor forces that could help the foreign firms working in the country.

The U.S. rejected any charges of favoritism and defended the noncompetitive contract procedures as necessary to get critical reconstruction projects started quickly.
This week's conference in Amman brought together some 300 international companies and 300 Iraqi businessmen under the auspices of the CPA's Project Management Office. The conference comes as Washington last week opened bidding for a string of contracts worth $5 billion, many of them in the electrical, water, building, security, transportation, and communications sectors.

U.S. officials asked companies attending the "Outreach 2004" conference to submit bids for contracts by next month. Officials said the contracts should be awarded by March.

Bidding for the new contracts is in line with strict new guidelines from Washington. Earlier, there had been heavy criticism over the award of several major contracts without competition. Some U.S. legislators alleged favoritism, saying the noncompetitive contracts were going mostly to companies with good political ties to the administration. One name often mentioned was Halliburton, an oil-services company once run by U.S. Vice President Dick Cheney.

The U.S. government has rejected any charges of favoritism and defended the early noncompetitive contract procedures as necessary to get critical reconstruction projects -- particularly in the oil sector -- started as quickly as possible.

The General Accounting Office (GAO), a watchdog body of the U.S. Congress, will closely watch the awarding of the new contracts.

As U.S. officials press ahead with reconstruction, many Iraqi businessmen have complained that they are not being considered for large contracts. Those complaints dominated a meeting between Iraqi entrepreneurs and retired U.S. Admiral David Nash, who is in charge of the Pentagon-run Program Management Office, on the sidelines of the Amman conference.

News reports say a delegation from the American-Iraqi Chamber of Commerce in Baghdad called on the U.S. administration to facilitate credit and pay in advance for contracts to enable Iraqi companies to win a larger share of the work.

The Iraqi firms -- emerging from a decade of U.S. sanctions -- are unable to match the capital and financial capabilities of foreign firms. At "Outreach 2004," those foreign firms came principally from the United States, Turkey, Australia, Saudi Arabia, Italy, Hungary, the Netherlands, Switzerland, Jordan, and India.

Nash told reporters in Amman that how much of the work now on offer will go to Iraqi firms is unclear but, as he put it, "we should have that number probably in a month or so, before we start announcing the contracts."

To date, Iraqi firms mainly have been awarded subcontracts on smaller projects. "The New York Times" this week said Colonel Anthony Bell, the chief contracting officer in Baghdad, "acknowledged that Iraqi companies had not won large contracts. [But he said that] they had won nearly two-thirds of the smaller contracts to date." He did not put a dollar value on the contracts won.

The next big event on Iraq's reconstruction calendar is likely to be a major international trade fair in Baghdad in early April -- the first in post-Hussein Iraq.

Raaed Ommar, head of the Iraqi-American Chamber of Commerce, said in Amman on 12 January that the fair, endorsed by the CPA and originally planned for early March, was moved to April in order to accommodate what he called "large interest" companies in the United States.

Ommar said he expected 6,000 to 8,000 participants at the fair, dubbed "Destination Baghdad Expo," with 90 percent of them coming from abroad.

He said a special security force combining units from the U.S. military, the Iraqi Interior Ministry, and private security firms will guard the fair.