Basra’s Big Business: Fake Building Contractors Defaulting on Jobs

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.

2 Responses to Basra’s Big Business: Fake Building Contractors Defaulting on Jobs

  1. gaga March 1, 2013 at 7:56 pm #

    Shafaq News / The municipality of Basra revealed on Monday, signing investment contracts between the municipality and investment companies to build apartments and residential units in Basra, indicating that the contracts oblige the conducting parties to plant a green belt of trees around those complexes.

    The director of Basra municipality, Abdul Zahra Mohammed Sewede said in an interview with “Shafaq News”, that “two investment contracts have been signed between al-Saqer al-Jareh company for real estate investments and investor , Retha Saleh where the first contract includes building 1822 housing units that include 1468 apartments distributed on 84 different residential building. ”

    He pointed out that ” adding a clause to the contract and that the investor must plant green belt separating the two pieces in a duration of implementation of the two projects up to 5 years from the date of delivering the property.”

    Basra is witnessing since the mid-nineties a housing crisis that has worsened greatly in the past few years as a result of high population growth and escalating immigration from other southern provinces, most notably the repercussions of house prices crisis and residential plots dramatically.

  2. gaga March 1, 2013 at 7:58 pm #

    USD 450 millions?????????????????????????