Iraq’s ‘Dodgy’ Power Generation Deals

Reuters reports that Iraq’s government has admitted to being duped when it signed multi-billion dollar power plant contracts with foreign companies that it later discovered were either bogus or had lied about their financial status.

The announcement is embarrassing for Nouri al-Maliki’s government as it tries to lure foreign investors into Iraq.

“These contracts damaged Iraq’s reputation,” a visibly embarrassed Deputy Prime Minister Hussain al-Shahristani told reporters. “But this does not mean that key projects to build large plants will be affected.”

Shahristani made the announcement a day after Maliki ordered his electricity minister to step down and the government cancelled the two power generation contracts.

He said Iraq planned to sue the two companies, one German and one Canadian, for fraud. The Electricity Ministry said Iraq would not lose any money because the contracts were designed to be paid long term.

Shahristani said Iraq’s investigation had found one of the companies involved, Canada’s CAPGENT was a “fake” with no offices, manufacturing operations or ability to carry out the work it had been contracted to do for the ministry.

He said the Canadian company had claimed it had financial backing from the U.S. Export-Import Bank, but he said U.S. officials had denied any knowledge of such an operation.

The other company, German firm MBH, had declared bankruptcy before signing the Iraqi deal, he said.

(Source: Reuters)

Comments are closed.