Faw Port Companies Exempted from Taxes

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Faw Port Companies Exempted from Taxes

By Omar al-Shaher for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraq has decided to exempt foreign companies involved in the Faw Port project from customs duties and taxes. This decision was an attempt to accelerate the completion of the stalled project, through which Iraq has sought to confront Kuwait’s maritime expansion by building a similar port nearby.

A government statement issued on Aug. 27 said, “In accordance with the laws in force, foreign companies shall be exempt from taxes and duties for the purpose of executing the Faw Port project, given that it is a developmental project.”

In April 2012, Iraq laid the foundation stone for the Faw Port project in the al-Faw peninsula in southern Basra. The project has an estimated cost of 4.6 billion euros ($6.1 billion), and the port’s annual handling capacity is predicted to be around 99 million tons. This would make it one of the largest ports in the Arabian Gulf region. Yet construction on the project has stalled and little progress has been made.

The Greek construction company Archirodon was awarded the contract to build the port’s eastern breakwater. Yet the companies that will win contracts to construct the port’s main structure and western breakwater have yet to be revealed. There have been reports that four companies submitted distinguished proposals last month, and one of them will be selected within days.

Speaking to Al-Monitor, Ihsan al-Awadi, a member of the parliamentary Service Committee, said, “The completion of the Faw Port has been stalled due to political conflicts and security conditions.” He explained, “Lately, work on the project has changed.”

Awadi said, “The required designs were completed by companies contracted by Iraq in 2009 to build the port, and they were handed over to the Iraqi administration. Construction on the initial parts of the project, which consist of the eastern breakwater, has started.” He added, “A canal must be built in the sea with a width of 12-13 meters and a depth of 200 meters,” noting that “As soon as the drilling rigs … arrive, work will immediately start in order to build the canal.”

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