Firms battle for Iraq contracts

Over 1000 representatives of British, Asian and Middle Eastern firms turned up to a Bechtel-organised meeting in London Friday looking to secure contracts for the rebuilding of Iraq.

    Millions of dollars in profits are up
    for grabs in post-war rebuilding

    The US construction giant – the prime contractor for rebuilding infrastructure in Iraq in a deal estimated at $680 million over 18 months – gave the outlines for how to submit a tender in a London hotel.


    Between 20 and 30 opponents of the US-led war in Iraq demonstrated outside, chanting, "vultures, vultures".


    Bechtel hosted a similar meeting in Washington last week and will be in Kuwait for the final presentation to potential bidders.


    The US corporation was chosen by the US Agency for International Development (USAID) as the prime contractor to rebuild Iraq after the US-led war. Bechtel has been accused of capitalising on its close links to the Bush administration in securing the contract.


    The company said it expects to farm out at least 90 percent of the rebuilding work.


    USAID has been criticised for awarding prime contracts only to US firms while excluding many local bidders and foreign firms. The only way in which foreign firms can get USAID work in Iraq is as subcontractors.  

    Iraqis have been critical of how
    occupation forces are running
    their country


    The Iraq Reconstruction Group, which says it represents some 500 Iraqi professionals, urged Bechtel to work with the people of Iraq.


    "We don't want Bechtel to be a centre of hate. Please don't do it for the Iraqi people but with the Iraqi people," said group representative Abbas al-Hussaini.


    Arab companies may be among those which pick up contracts. Jack Shaheen, Bechtel Corporation senior vice president and manager of operations, said contractors from the Gulf and Middle East had proved they could compete with firms from around the world.

    "They've demonstrated their ability. They have been doing this for years," Shaheen told reporters on the sidelines of an investment conference that drew top Arab financial officials and business people. "There is no shortage of talent in the Gulf, in the Middle East."

    But Bechtel insised that the huge interest shown - estimated to reach 10,000 firms by week's end - is out of all proportion to the amount of business likely to be awarded. It noted that of 14 subcontracts given so far, the average value of each was less than $500,000, except for a single port-dredging contract.

    Companies sidelined


    During today's presentation, Bechtel admitted that firms from nations which had supported the US-led war, such as Britain, had an edge. 

    "Will the coalition companies be advantaged? Yes, that's pretty logical," said Tom Elkins, who is in charge of procurement for Bechtel's Iraq work.

    Only US firms have benefitted
    from the tendering process 



    But the French are not excluded," he added, referring to one of Washington's most bitter critics over the conflict.


    "Get in the theatre. Show you can deliver. Then you're going to be hired," he told around 600 people gathered at a hotel in west London.

    Meanwhile, a report in the Wall Street Journal has said that firms belonging to countries that aided the US-backed invasion of Iraq may be given greater consideration.

    The newspaper reported in its Thursday edition that despite the US government saying the subcontracting process is going to be fair, open and apolitical, firms belonging to coalition countries are expected to be favoured.

    "In private conversations, US officials display a different attitude: anger at allies that did not cooperate in the war and strong suggestions that they won't be winners in the subcontracting process,” the Wall Street Journal said.

    Bechtel itself says that it will not play favourites. "We have no such instructions" to blacklist non-coalition nations, said Terry Valenzano, head of Bechtel operations in Kuwait. Aside from countries banned by US laws - Iran, Libya, Syria, North Korea and Cuba - "the list is open”, he said.

    But one US official was quoted as saying that the general contractor has been asked to exclude companies from France, the Wall Street Journal added.

    However the cynicism appeared to extend to Friday's meeting,

    where a US water resources expert, originally from Iran, dismissed the process as a charade.


    "Business is not done this way usually," he said. "It's just public relations... everything will go to US and UK companies."


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