Changes in legislation have led to an explosion in building companies in Iraq’s economic hub, Basra. Some exist only on paper but get jobs worth millions. Some say it’s the fault of US-formulated laws. Others say its corruption and public budgets.
One of the most popular kinds of business in Basra city, the second most important economic hub in Iraq after Baghdad, is the building contract business.
According to the local Chamber of Commerce, the number of building contractors registered with them is now over 1,000. And there are thousands more waiting for registration, they said.
But the reason for the popularity of this kind of work is not the fact that there is so much reconstruction work required in the region as the result of the many military conflicts over the years. Rather, it’s because it is so easy to start your own building firm up.
In fact, most of these companies exist only on paper. They don’t have any assets, offices or staff. However they still manage to win contracts for reconstruction projects, sometimes worth millions of US dollars.
“There are companies which have no more than IQD2 million [around US$1,700] who have signed contracts with the Department of Defence to supply the army with equipment,” a local legal expert Tariq al-Aberseem told NIQASH. “Those contracts are worth millions of dollars.”
And then, when they eventually fail to deliver upon these contracts, the companies end up being blacklisted.
Before the 2003 US-led invasion of Iraq that toppled former Iraqi leader Saddam Hussein’s regime, the situation was different. Most of the reconstruction projects were undertaken by the Iraqi government, with wildly varying degrees of success.