Firms attending an international conference on Iraq's reconstruction in Amman have said security concerns will not stop them from playing a role in Iraq.

"The United States is giving them (Iraqis) a lot of money and we want to be in on that," said Tom Spencer, vice-president of Business Development at US defence systems firm Kollsman.

"It is just a risk but one that is borne out by the potential profit."

About 300 companies - mostly from countries that supported the US-led war on Iraq - were represented at the conference attended by US officials in charge of giving out $18.6 billion in US-funded contracts.

Similar conferences have been held in neighbouring Kuwait, and the first $5 billion in new contracts are due to be awarded at a trade fair in Baghdad in March.

Fear of attacks

"The United States is giving them (Iraqis) a lot of money and we want to be in on that. It is just a risk but one that is borne out by the potential profit"

Tom Spencer,
Vice-president, Kollsman

Firms said fear of looting, sabotage and attacks on organisations seen as cooperating with the US occupation and on hotels where foreign contractors stay, were driving up security costs and repair bills.

But many companies are willing to bear those costs in order to have a foothold when the situation eventually stabilises.

The United States opened bidding this week for $5 billion in new contracts to rebuild Iraq, the first in a string of lucrative US-funded deals.

Countries which did not back the war, including France, Germany, Russia and Canada, have been barred from competing.

One French firm exhibited at the conference, but generally German, French and Canadian firms were absent although sub-contracts are open to all. The rest talked "war spoils".

"Everything in Iraq has to be built from the ground up, which means the current risks are worth the business opportunities that are going to be produced for generations to come," said James Angelus, president of USI Capital Corps, an emerging markets energy communications group.

Legal worries

For companies considering making their own long term investments in Iraq, legal uncertainties cloud the future.

"Some small companies are taking the risk but at least in the US a lot of large companies want to see what happens when the coalition leaves because a new Iraqi government may suspend or modify the new US regulations to the detriment of foreign investors," said Ayaz Shaikh, managing partner at global law firm Pillsbury Winthrop.

"Some of these laws give 100% foreign ownership and a succeeding Iraqi authority may be inclined to change that."

While Iraqi firms worry they are missing out on the big contracts, they say foreign companies who are getting them must work with Iraqi partners if they are to minimise security problems.

"I don't think any of the foreign companies can work in Iraq without Iraqi companies because of the security situation," said one Iraqi contractor.

"Iraqi sub-contractors and Iraqi employees are less of a target. They need us."