Attached to Iraq

A lot has happened since then. Less than a year down the line, bleakness has returned to Iraq’s security situation through insurgency and civil clashes. Sectarian divisions have been attributed to this round of internal conflict, causing bloody combat in Mosul, Iraq’s second largest city, which fell to the extremist group, ISIS – the Islamic State of Iraq and the Levant.

In October 2013, optimism appeared to reign in Iraq. A bevy of Iraqi ministers had visited Dubai to promote the nascent economic benefits their country could offer to affluent GCC construction businessmen. Meanwhile, the country’s housing, rail, aviation and public works ministers began conversations meant to lure monetary flow and investor confidence into the country.

A lot has happened since then. Less than a year down the line, bleakness has returned to Iraq’s security situation through insurgency and civil clashes. Sectarian divisions have been attributed to this round of internal conflict, causing bloody combat in Mosul, Iraq’s second largest city, which fell to the extremist group, ISIS – the Islamic State of Iraq and the Levant.

400 kilometres north of the capital Baghdad, trouble had officially returned to Iraq.

Rearranging Iraq’s security and infrastructure requires a sound government be established. This seems unlikely given the failure to form a working parliament despite the clear need for one. Parliament was adjourned twice before a speaker was finally elected on 15 July, 2014, and the disagreements between various political Iraqi factions have held up the creation of a new government.

The prompt appointment of a prime minister and president for the country is crucial to alleviating extremists’ presence, which has gravely impacted Iraq’s pivotal infrastructure and commercial operations.

Surprisingly, construction professionals in Iraq seem less defeated than one would assume. Speaking to Big Project ME from Baghdad, Sabah Ghaidan, CEO of construction machinery distributor firm Al Ghodwa Group says that the uncertainty in the country (and therefore, its construction market) will only clear once a solid parliament has been established.

“It (the security situation) will be solved, but it needs time,” he asserts over a crackling phone line. “Everything is okay; everyone wants to solve this situation and we need a strong government for that.”

The construction industry in the GCC has kept a keen eye on the security situation in Iraq, which in January 2014 was found to be the third-largest projects market in the region with developments worth $519 billion either planned or underway in the country.

Only Saudi Arabia ($1.05 trillion) and the UAE ($713.15 billion) had larger projects markets as per MEED’s Gulf Projects Index as of January 2014. The absence of a cohesive government threatens to detriment Iraq’s infrastructure rebuilding, consequently also discouraging foreign firms from participating in the Iraqi market.

Ammar Al Assam, owner of Dewan Architects & Engineers knows this all too well. 130 kilometres north of Baghdad lies Samarra, part of Iraq’s Salah ad-Din governorate where his firm has been commissioned to undertake a university design project.

Listed as a UNESCO World Heritage site, fears of an encore of the 2006 attack on Samarra’s historic Al-Askari mosque have returned to the fore.

Assam had expressed confidence in the security of the culturally significant Samarra when the project was announced in February 2014. Despite all that has transpired since, he hasn’t been deterred from his stand.

He remains confident that the security situation in Iraq – more specifically, Baghdad – is one his team can still contend with.

“The owners of Dewan are originally from Iraq. We left the country in the 1970s, but were probably one of the first few companies to return. I think it was in May 2003, a month after the war.

“We still have ties with the country and weren’t concerned about going to Iraq per se. The security situation has been bad from 2004 onward and that’s unfortunate, but we know how to work around things.”

Assam insists that maintaining one’s security in Iraq also depends on the vigilance deployed by employees and firms.

“All our employees there are Iraqi and have a sense of where to go or not go. This isn’t to say it’s 100% safe to live there – people get killed every day. You could be waiting at a traffic signal or headed for the ministry for some paperwork and God forbid, anything could happen.”

“But we’re Iraqi. We blend in easier and don’t keep excessive security,” he adds. “In Iraq, the more low-key you are, the safer you’ll be.”

Bora Yildiz, executive partner at Turkish contracting firm EID, was at the conference held in Dubai in October 2013. Speaking about his experience of working in Iraq, Yildiz had said at the time: “Challenges exist in terms of security, logistics, international labourers, suppliers and so on. Logistical problems persist when the need for getting machinery, materials and manpower into the country arises.”

Despite having highlighted the glaring flaws in the apparatus of the Iraqi construction market, Yildiz was buoyant about the investor returns the country’s untapped market could offer.

Today however, entering and capturing the temperamental Iraqi market will require strategic managerial forces on the ground, which Yildiz admits are difficult to source.

“The challenge at the moment is to alter expats’ opinions of Iraq,” he tells Big Project ME from Turkey. “They’re focusing on only the specific areas of the country where conflict is occurring. There are some territories which are relatively safer, but overlooked when considering the condition Iraq is in right now.

“Around 400 EID employees are currently based in Iraq,” Yildiz reveals. “We have had to increase security on-site like most firms have. But the real difficulty for firms, including us, has consistently been to encourage and stimulate people to work in Iraq. They demand higher salaries which places an increased burden on our existing expenses of security, material sourcing and so on.”

Pragmatically viewed, the security of manpower is not the only facet construction companies operating in high-risk zones have to worry about.

Over a poor quality phone line from Baghdad, Rebin Mukerji, sales manager of oil well cement for Lafarge Cement’s Iraqi operations highlights the impact increased product prices have had on business in the country.

“The problem is mostly in and around Baghdad. The south of the country and Kurd region is relatively safe,” Mukerji says.

“Even though the main roads in the country are almost clear, transportation costs to move materials from the northern part of the country to the south have increased by almost three-fold.

“The prices of our products have had to be lowered, and this is something all companies operating in the market have had to do. Most companies, much like us, have kept their operations on hold until the end of Ramadan,” he adds.

To each person interviewed for this piece, the Holy Month of Ramadan has become one of hopes and expectations.

Amal Al Dabbagh, member of the economic section at the Consul General of Iraq’s office in Dubai is worried about her family in Iraq – which is, at the moment, safe in the South – but she cannot wait for Ramadan to end so that she has a better idea of what the future holds for her country.

“We’re all very confused,” she rues. “Everything has stopped and I have no information at the moment. Hopefully, after Ramadan, I will have a better idea of what the situation is like in the market.

“But right now, we don’t even know who the ministers for each portfolio are, when the government will be formed or what happens next.”

Pegging recovery hopes on Ramadan is a sensible move says Assam, since the government is – technically – meant to be formed during July, which coincides with the holy month in 2014.

“Ramadan is meant to be the month of forgiveness and peace,” he says. “It has unfortunately become about politics in Iraq this year. I don’t think the ‘Ramadan factor’ will necessarily deter any violence, but I’m hopeful.

“Maybe it will be a good omen for the country.”


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