Construction in Iraq – Staying the Course

The headlines on the establishment of a new government are indeed welcome. For a small firm like ours, the uncertainty and stop start procurement process is a commercial killer. We have to say that a lot of time and effort proportionate to our size has been expended on producing and delivering proposals that then hang for long periods. We hope then that clear new directions can reach the work face of project development departments. Clarity will also help the larger investors who I am sure are waiting until the political situation stabilises.

For our part, we are in London this week meeting potential partners and clients. At these meetings it crossed my mind, “why are we in London, we should be in Baghdad or Basra discussing work opportunities in Iraq”. We debated the point and of course it comes down to safety of personnel. The old cliché “I would not ask employees to go where I would not go myself” comes into play, and I fear we are just not ready for the safety situation on the ground. When it costs $7,000 a day to provide a “secure” car trip to town and the employee is only earning a fee of say $2,000 all-in, it is just not viable for smaller professional operations such as ours.

Nevertheless we participated in our meetings. One approach for example was to work with City partners to establish an Iraq Property Fund. Our soundings and conclusions though were that for UK/European based institutions it was just too early for them to allocate even high risk funds to an unknown market. It is certainly a live idea however, and perhaps we will focus on Middle Eastern institutions who may be more comfortable just now with the situation, and formulate a mixed use development plan..

We are also starting to mix with the few technical players who are in the market and finding solid projects to at least make proposals on. This has led us to 3 project possibilities and we are currently providing cost advice to these potential partners.

Our strategy is therefore very much linked to the success of the new government. We will be watching carefully to see if they manage to establish stability and economic activity increases. When that happens, we decided in London that we should base our presence on Basra. We will discuss our reasoning in our next blog.”

Blair Anderson Ltd can be contacted on the following email: [email protected]

4 Responses to Construction in Iraq – Staying the Course

  1. localQS November 23, 2010 at 1:52 pm #

    How can designers estimate the costs of a project in such a volitile market?

  2. Faisal November 24, 2010 at 2:40 pm #

    You can bet the house that labor and all costs in Iraq are going up as most projects (currently on the books) kick into second gear..

    So if you are a contractor being offered to do 10,000 houses in 4 years, you might want to carefully consider and rather do a chunk of the work. You will very likely find yourself in a sticky situation if you commit to large projects and get a little too ambitious!

    My five Dinars for the day 😉

    More on constructioin costs in Iraq in the next episode

  3. hayder December 17, 2010 at 3:27 pm #

    Just a note regarding the cost of doing business in Iraq. Hire locals and asians to do the work! you certainly won’t need to spend $7000 for a car trip into baghdad! If interested do give me a reply (been working in Iraq on and off since 2003, various projects telco/oil/real estate), there’s certainly no more difficulty (nor cost) of working in iraq than anywhere else in the middle east.

  4. Roya January 31, 2011 at 12:57 am #

    Dear Mr Blair
    Do you know how we can get in touch with the people in charge of these projects?