The spoils of war

The reconstruction contracts are being awarded. But how many will go to British companies? Bob Reynolds reports

Even before the first shots in the war had been fired there was a dispute about who would be rebuilding Iraq in the aftermath. British trade secretary Patricia Hewitt challenged an early decision by the US administration to award all reconstruction contracts to American companies.

She contended that Britain was a partner - albeit a junior partner - in the coalition of the willing. Our support for the war to install democracy in Iraq should warrant lots of rebuilding assignments.

The US Treasury agreed that its plucky partner should get some sub-contracting work. In March, USAid was given $900m (£572m) as the starting point. It developed a post-war reconstruction scheme called Vision which would be the biggest rebuilding project since World War 2.

Invited to tender

Five major US contracting companies were invited to submit tenders for the work. Among them is the Texas-based oil company Halliburton, where US vice president Dick Cheney had served as chief executive. The scope of the work is immense.

The value of contracts awarded is expected to be about $1bn.

USAid said: ' The contractor will assure the successful design, rehabilitation and construction of infrastructure projects in support of the US government' s assistance to Iraq in the areas of: port and airport rehabilitation, electric power systems, road networks and rail systems, municipal water and sanitation services, school and health facilities, select government buildings and irrigation systems.'

Unofficial figures from the United Nations suggest that the final tally could be as much as $30bn.

British companies with experience of working in Iraq are concerned however that not enough official help is being given to ensure UK companies get significant tranches of work.

The British Consultants & Construction Bureau (BCCB) brought together 75 UK businesses on 10 April to create a plan for winning postwar work. Colin Adams, BCCB chief executive, said: ' I continue to call on the government to direct the UK' s bilateral funding work to the principal members of the coalition forces.

' Furthermore, funds should be made available as a grant or loan for specific projects, which can be carried out by British firms for the long-term benefit of the Iraqi people. Precedents were set for the latter in the aftermath of conflict in Kosovo and Serbia where the British government made funds directly available for British firms, which kick-started the reconstruction process.'

More must be done

Although UK companies are satisfied with the initial efforts by the government, he said, they are questioning whether this is sufficient. ' The window of opportunity to get British firms well established will be lost if we wait until the international institutions (World Bank, United Nations, European Commission) advertise projects. By then, many other countries will already be working in Iraq using their tied bilateral funds.'

Among the contracts awarded already are: $10m for reconstructing Iraqi local government and education. Research Triangle Institute picked up a $7.9m deal to provide technical assistance to strengthen local administrations, civic institutions and civil society. Creative Associates International (CAI) was awarded a $2m, 12-month contract which USAID said was ' to address immediate educational needs and promote participation of the Iraqi people in a sustainable, decentralised educational system' .

A $4.8m deal for managing Umm Qasr port went to Stevedoring Services of America and a $7m contract for USAid personnel support to International Resources Group. A contract to put out oil well fires and repair oil facilities was awarded to US engineering firm Kellogg Brown & Root by the US Army Corps of Engineers.

Four USAid contracts have yet to be awarded, including airport management and an estimated $600m capital construction project for rebuilding transport, power and water networks. Up to three more tenders are expected soon, for agriculture, economic governance, and monitoring and assessing the capital construction contract.

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