Iraqi giant concerned about corruption
Country’s largest precast manufacturer says infrastructure law will need government assurances
As Iraq’s parliament continues to negotiate the country’s long awaited infrastructure law, one of the county’s leading construction firms has raised concerns over the way projects are being bid and budgeted for.
Referring to recent project bids and published figures on project budgets, deputy CEO of Al Fayha, the country’s largest private sector employer and precast manufacturer, says the much disputed law will need the government to provide assurances to international private sector firms for them to buy into the country’s regeneration.
“On one occasion we bid for 60% of a project at $53m, then heard it had been awarded for more than $400m, when it shouldn’t have been more than $120m,” stated Salahuding Al-Ibrahim.
“There are seven smaller intersection bridges to be built, each for $10m and for a bridge of that size, that’s big money,” he added.
The infrastructure law is being disputed by opposition MPs, despite the best efforts of Prime Minister Nouri al-Maliki to push it through.
According to the Prime Minister’s party, the infrastructure law would allow the Iraqi state to take out ‘loans’ with companies tasked with jobs and then repay them at a later date.
In September of this year, the Prime Minister called on the Parliament to endorse the infrastructure law for an amount of $36bn, but it was rejected by both the al-Iraqiya and Kurdish opposition blocs.
“Because of the ambiguity in the legislation with regard to how money will be spent and how it will be managed, this draft law opens the door even wider to financial and administrative corruption,” argued MP Haider al-Mula, a member of the main opposition party, Iraqiya, according to a report by Iraq Business News.
Suggesting a solution to the issue, Al-Ibrahim said the banking sector needed urgent reform, so as to allow native companies to access the necessary finance to meet ever bigger projects.
“This is one of the main issues obstructing our expansions that will better serve the clients. For example, when you approach the bank with a tender and request the relevant bond, the system cannot accept the new format, so you risk a stop to the projects.
“Companies like ours end up playing middle man until we can convince both sides, but all this causes delays.”
An alternative proposal currently being put forward by parliament would see private companies financing entire projects on the promise of payment from the government at a later date.
At a conference held in Abu Dhabi in May of this year, construction and housing minister Mohammad al-Darraj said that no budget could meet the infrastructure needs of Iraq, and urged private investment in the country.
