The Ninewa Investment Commission approved the building of a large shopping mall at a cost of 34.260 billion Iraqi dinars ($29 million), according to Aswat al-Iraq on Monday.

The mall will be in the al-Nour neighborhood of eastern Mosul, and it will be built by a Turkish company.

This is the Commission’s 29th investment permit.

(Source: Aswat al-Iraq)

The Baghdad Municipality is to build three major housing projects in the capital’s outskirts for low-income families.

Azzaman report that the projects, work on which is to start soon, will include 395,000 housing units and will be sold to low-income families at reduced prices, according to Hakeem Abedzahra, the municipality’s spokesman.

The first project of 65,000 housing units will cover the once sprawling al-Rashid military camp. A U.A.E. firm has won the contract for its construction, Abedzahra said.

He said Baghdad will soon become the scene of what he described as “a flurry of construction” that will employ tens of thousands of people.

The housing project at al-Rashid camp will include a medical city as well as sports facilities, he said.

The second project will be built close to the low-income township of Sadr City and will involve 75,000 housing units.

“More than 50 foreign firms offered bids to execute this project and we have now settled on eight of them,” Abedzahra said without elaborating.

He said work on Sadr City project was also to start soon.

The third project will be close to Ghazaliya neighborhood with 35,000 housing units, Abedzahra added.

The remainder, 220,000 housing units, will be built in outlying areas of the capital Baghdad, he said.

“This is a massive housing investment through which Baghdad will witness a major flurry of construction. Besides houses and flats there will hospitals, amenities, annexes and sports cities,” Abedzahra said.

(Source: Azzaman)

Authorities in Iraq say they will install “giant power generators” in Baghdad in their latest bid to put an end to power shortages.

The plants will have capacities of about 5MW – hardly ‘giant’, but the plan is to have more than 500 of them in place throughout the city by next summer, operated by private investors, but linked to the national grid.

Electricity shortages have worsened recently and Baghdad’s nearly 6 million people now have barely two hours of uninterrupted supply daily from the national grid.

The U.S. alone has invested more than $5 billion dollars [6 trillion Iraqi dinars] to revamp the grid. Billions more have been poured into the electricity system by the central government.

Nonetheless, power supplies are still much worse than before the U.S. overthrow of the former regime in 2003.

A new committee headed by the under-secretary of the Electricity Ministry, and comprising the Governor of Baghdad as well as other senior government officials, says it is time for Baghdadis to say “good-bye” to power shortages.

But many in Baghdad are skeptical and say all government promises to improve public services, including electricity, have come to nothing.

However, Baghdad’s Governor, Salah Abdulrazzaq [Salah Abdulrazeq] says it is different this time, saying all government departments will be involved in the effort to supply Baghdadis with continuous power supplies.

The idea this time is to install large power generators with a capacity of up to 5 megawatts in various neighborhoods throughout the capital.

Abdulrazzaq wants to have at least 500 such generators in place by the summer of 2011. These generators will be operated by private investors but linked to the national grid.

“The generators should produced about 1,750 megawatts of electricity,” he said.

It is the first time private investors are allowed to install power generators as part of the national grid. It is not clear what impact the hundreds of power generators will have on the environment particularly in densely populated neighborhoods.

Baghdad alone needs more than 3,500 megawatts to meet domestic consumption.

That means the government should divert up to 1,500 megawatts from the national grid to Baghdad of a total national power production that hovers around 5,500 megawatts.

(Source: Azzaman)

Seven years after the invasion that ousted Saddam Hussein, Iraq largely has been unable to revamp business laws that would help make the country more attractive to investors, according to a report from Bloomberg.

“Investors still note security concerns, but now are more likely to cite regulatory hindrances and other practical barriers to doing business,” the U.S. State Department said in its 2010 Investment Climate Statement on Iraq.

Foreign direct investment totaled $1.1 billion in 2009, most of it in the oil industry, according to the United Nations July World Investment Report. Neighboring Iran, under a fourth set of UN sanctions, took in three times as much.

Lawmakers in the outgoing parliament weren’t able to approve 72 draft laws meant to help accelerate economic growth, said Thair Feely, director of the government’s Baghdad Investment Commission.

Legislation awaiting approval includes a measure that would make it easier to register a company. “It can take four or five months and costs a fortune, about $15,000 to $20,000, compared to only 200 pounds ($300) in the U.K.,” Feely said by phone from Baghdad. “It’s unfair.”

The World Bank estimates it takes an average of 77 days to open a business in Iraq, almost four times the average in the region. Iraq fell three places in the Washington-based bank’s 183-country ease-of-doing-business scale to 153rd this year, below Tajikistan and Haiti.

Issues such as a cash-based banking system, corruption and limitations on land ownership have also damped investment, said Arndt Fritscher of the Berlin-based Rebuild Iraq Recruitment Program, which works with 160 European, mostly German, companies with business interests in Iraq.

“The security situation is not our problem because we just pay more,” Fritscher said. “German industry is ready to go, but there is no basis to go from. We would like to set up power plants, for example, we just need the ground.”

Iraq’s National Investments Law of 2006 bars foreigners from owning land, though it was amended in November to allow non-Iraqis to buy property for housing projects. Berlin-based Transparency International, an anti-graft group, placed Iraq and Sudan in fourth to last place in its 2009 corruption index of 180 countries.

The economy is estimated to have expanded 4.2 percent last year, the Washington-based IMF said, powered by oil exports. Companies including London-headquartered BP Plc, Royal Dutch Shell Plc, which is based in The Hague, and Paris-based Total SA, have signed contracts with Iraq to boost oil production after two bidding rounds for development rights last year, even in the absence of a hydrocarbons law. A third bidding round for natural-gas deposits is set for later this year.

“The oil business has such great profits and returns on investments that companies are willing to take risks,” said Ascanio Martelli, chairman of Bari, Italy-based Atami Group, which acts as a consultant for Italian energy companies working or seeking to work in Iraq, in a telephone interview.

The government has pushed through some measures to attract investors. The National Investments Law exempts foreign companies from paying taxes for 10 years and from paying import fees for three years.

“We are trying to offer incentives,” Iraqi government spokesman Ali Al-Dabbagh said in an interview from Baghdad. “Our industries have many problems that do not encourage foreign investors or even local industrialists.”

Iraq needs $400 to 500 billion to get things back on track, according to the Baghdad Investment Commission’s Feely.

“Unfortunately, we only receive hopes and promises,” he said. “We can’t do it without foreign investment. We can’t do it on our own.”

(Source: Bloomberg)

More than 150 local and foreign firms will participate in the Basra Construction International Fair that will take place by the end of this month, according to a report from Aswat al-Iraq.

“Most of the participating firms are either foreign or Arab,” said a local source.

The fair will start on Sept. 24th and end on the 27th.

There will be another fair devoted to the oil sector in November.

(Source: Aswat al-Iraq)

Karbala’s Investment Commission signed a Memorandum of understanding (MoU) on Saturday with eight Romanian companies to implement a number of housing, agricultural and industrial projects in the province.

“The projects includes the construction of 1,000 building units over an area of 10 hectares [40 donums] equipped with all facilities as well as the building of a farm for cow husbandry and animal fodder,” Tarrad al-Asali told Aswat al-Iraq news agency.

Another MoU was signed to implement a project to build a waste-recycling plant, and a facility to pave roads without creating dust,” he added.

(Sources: Aswat al-Iraq, Karbala Investment Commission)

A Dutch company will design a model for low-cost housing in Maysan [Missan], a spokesperson for the Dutch companies in Missan last week.

“A Dutch group specialized in housing projects has agreed with the State Ministry for Marshes Development to design low-cost houses,” Jaseb al-Marsoumi told Aswat al-Iraq news agency.

“The government will receive the first model in early October,” he added.

“The project will contribute in solving the housing problem in the province, benefiting from the Dutch company’s experience in this field,” al-Marsoumi noted.

(Source: Aswat al-Iraq)

The Mayor of Baghdad has inaugurated new al-Nahrwan bridge, which links Baghdad to northern and southern Iraqi provinces and helps traffic of trucks to the northern areas of the country without having to pass by the capital, according to the Baghdad Mayoralty in a statement on Sunday.

“The project, a vital one for the movement of passengers and cargo, is an important link between the province of Diyala and the northern and southern provinces as well as Baghdad,” Baghdad Mayor Salah Abdulraziq was quoted in the statement received by Aswat al-Iraq news agency.

“The 14-km-long infrastructure project was implemented by Iraqis with French participation at a cost of 16 billion Iraqi dinars [$13m],” he added.

(Source: Aswat al-Iraq)

Iraq, 1980. The Iranian F15s swooped around the partially constructed Ishtar Sheraton, followed the Tigris river beside Abu Nawas Street and launched their missiles at Al Dora refinery. Thirty years of war and unrest had begun. I know because I was there – I was the project quantity surveyor then, working for the State Organisation of Tourism. On the other side of the table, and working for the contractors was my future business partner, Evan Anderson, so our firm is truly founded on its Iraq experience.

Now it is 2010 and we all hope that a new, peaceful phase for the Iraqi people can start. The US army is leaving, and democratic elections have been held. The conditions of working and security are not yet ideal but those of us who have affection for Iraq and perhaps a long strategic vision mixed with optimism must try to be positive and provide support wherever we can.

Of course, commercial benefit is the driver, but there is also an element of goodwill that motivates me to participate. Iraq has been good to me, financially and professionally. Maybe soon I can return some of the debt owed. I hope so.

So, my blog starts, but it will quickly develop and convert to the blog of my company, Blair-Anderson Iraq. But first then a bit more history of how we got here.

My name is Stewart Blair. I am the joint owner of the Blair-Anderson Group, www.blair-anderson.com who have many years experience in the construction industry in what is known as the Middle East. We have provided cost management services to clients from the UAE to Saudi Arabia, Bahrain, Qatar, Kuwait and Egypt. We have been established for almost 25 years in this field.

In 2003 our company joined forces with an Iraqi civil engineer with whom we had worked in Dubai on several projects successfully, and a business bond had been created. We decided then that the combination of our international experience, including a credible Iraq and Haider’s enthusiasm to become involved in his native Iraq would demonstrate our ability to handle assignments in Iraq. Haider Al-Ali is the managing director of the company.

This blog will try to track our business development efforts and also try to impart and share some construction cost and risk knowledge as we discover it.

Let us start with a construction oriented look at the Iraq market. Why Iraq? Well, the projects I was on, such as the Ishtar, Palestine and Babylon hotels, the Rashid hotel, Taji Island and Baghdad University were probably the last to benefit from modern peaceful technology. The highest of these was 22 floors, perhaps 75 metres. We have now completed several towers in the UAE exceeding 75 floors!

The ambitions of Iraq need to be serviced by modern technology therefore. In our opinion, every urban facility and service is needed. For construction, the best way to view the market is as an island, where everything needs to be imported. Of course there will be local materials and skilled labour and workforce, but a lot has to be done to catch up so that proper construction and maintenance can be achieved.

The first conclusion then is that it will be expensive. We will explore all the various cost heads as our blog progresses, but we are also cautious as all development needs a return, and until the economy can afford to provide that by an accelerated increase in earnings per capita and so GDP, we suspect private development will not be as fast as may be expected or hoped for.

Even now, we are experiencing a significant level of difficulty. As our services tend to be at the front end of the procurement process, we notice a lack of confidence in government agencies in their own buying processes. We understand that there will be a certain nervousness – why not, no significant purchases of international services have been made for years, and the “I will not be ripped off “ syndrome is strong.

The construction and development procurement process is in our view then a priority. Therein lies our conflict of interest though, so until others take up this issue there is not much, that service providers like us can do. This blog may reach such others then, and that is our hope, so they can assess the value of our services without the pressure of a sales pitch. We look forward to sharing our experiences, and perhaps success with our readers over the coming months.

Stewart Blair is founder and director of Blair-Anderson Holdings, specialising in project reviews, management and control systems feasibility/viability studies, cost planning and the management and settlement of disputes on major international projects. He has been involved in sensitive dispute management assignments both in the Middle East and Internationally. He has also been responsible for successful cost planning and cost control on several major projects comprising high rise, commercial, hotel and touristic developments.

Germany’s Siemens is eyeing up electricity investments in Basra.

“A delegation from Siemens met today (Sept. 2) with officials of the provincial council’s electricity committee to discuss ways to carry out projects in the power sector in Basra,” Ziyad Ali told Aswat al-Iraq news agency.

“The delegation expressed readiness to carry out power projects in the fields of construction of 11/33 kilovolt stations,” he said.

Also, a consortium of Turkish companies has proposed building a power station in Basra and a refinery to feed the plant with fuel, Ali added.

(Source: Aswat al-Iraq)

Iraq Minister of Water Resources, Jamal Rashid [Abdul-Latif Rashid], said that cracks in a water dam in Mosul are costing half a million dollars per year.

The Minister said that his ministry is about to offer tenders for international companies to repair the cracks and to reach the stage where the essential level of water is restored which could also help to solve electricity problem in the country.

(Source: Al SumariaTV)

The project manager of Sheraton Hotel in Basra confirmed on Thursday that the Integrity Board suspended the Sumar company after it reached its final stages, because the company did not hand over the project on time.

Wameeth Abass, an engineer on the project, told AKnews, “The Integrity Board suspended our work with the Sumar Company after we got to the final stages and have set 15th September as the date for the opening, because we didn’t complete the project within the deadline, which was the beginning of this month” .

“We have already organized a protest with the project’s staff, demanding to cancel the decision, because the work took a great effort from us.” The workers actually faced several problems that delayed the project for more than a year. Abass reportedly did not give details about the problems.

The Sheraton Hotel project is carried out at a cost of more than $50 million, and it is one of the oldest and best hotels in Basra. It is not connected with international Sheraton hotel chain.

The Sumar company is headquartered in Erbil and has carried out many major projects in Kurdistan.

(Source: AKnews)

US President Barack Obama delivered a major speech from the Oval Office on Tuesday, marking the official end of combat operations in Iraq.

As just over 50,000 US troops will remain in the country until the end of 2011 in non-combat roles, the real significance of the military draw-down is hotly debated.

But it is clear that the US remains committed to the success of the Iraqi mission, and the transition from Operation Iraqi Freedom to Operation New Dawn will continue to require considerable investment of both money and political will over the coming years. By no stretch of the imagination is the West simply walking away.

Vice President Joe Biden is again visiting Iraq and trying to coax the political factions to find some solution to the ongoing electoral stalemate. The latest snippets of information point to a possible agreement within days, but given the history of this election we shouldn’t get too excited just yet.

And in the business arena, activity is clearly increasing, especially with regard to oilfield development. To quote a headline from Forbes yesterday, “As U.S. Troops Move Out Of Iraq, Oil Companies Move In”.

The article concludes, “The rush is on for Iraqi oil”. And while oil will be the driving force, it’s fair to say the rush is on for Iraqi oil, gas, roads, rail, housing, jobs … the list is practically endless.

If your business can meet the needs of Iraq’s developing economy, Upper Quartile and AAIB can help you. For more information please contact Gavin Jones or Adrian Shaw.

Business Monitor International (BMI) has published a new report on business in Iraq.

Summary:

The oil sector contracts signed between Iraq and international energy companies in 2009 reflect the first stirrings of what the oil and gas industry hopes will be the reestablishment of a strong working relationship. Following years of underinvestment as a result of the economic sanctions imposed on Iraq following the 1991 Gulf War, Iraq is hoping to tap the expertise and capital of international oil companies (IOCs), their state-run national oil company (NOC) competitors and service companies in order to boost the technical capabilities of its infrastructure as well as the production and export capacities of the country’s crude oil, natural gas and refined products.

Owing to the 1991 Gulf War and subsequent UN sanctions Iraqi production suffered during the 1990s. The country was granted an exemption from OPEC production quotas while it operated under the auspices of the UN Oil-for-Food program, which allowed Iraq to export limited amounts of crude oil in exchange for the purchase of food and essential medical supplies.

Although the Oil-for-Food program was disbanded after 2003, Iraq still benefits from the OPEC quota exemption. BMI forecasts Iraq’s 2010 production at 2.47mn b/d, of which 1.62mn b/d will be exported, and the government plans to boost production to 12mn b/d by 2020-a production increase of 485% over the 10-year period. BMI sees this target as ambitious, forecasting 2020 output of 4.5mn b/d, but our projections still see 82% growth over the period.

While our outlook is sanguine, there are manifold risks to investment in the Iraqi oil and gas industry. In the long term, crude production growth will mean that Iraq will come under increasing pressure to rejoin the OPEC quota regime, presenting a potential cap on further output gains. In the short and medium term, Iraq’s large investment needs, political instability and security risks will all contribute negatively to the country’s energy sector aims. Furthermore, the role of ‘resource nationalism,’ particularly in a country with an insecure polity wary of foreign intervention, cannot be discounted in the upstream segment.

This can be discerned from the development contracts signed between Iraq and the various international companies jostling for position in the country’s energy investment plans. The final awardees originate from a broad spectrum of European and Asian countries, and only two US companies-ExxonMobil and Occidental Petroleum-were awarded contracts. Furthermore, the Iraqi government was keen to be seen as negotiating hard to obtain the best possible terms for the state, and the government has shown no hesitation in changing deal terms for its financial benefit. Earlier changes to contractual structures included a 5% decline rate provision for output above the applicable production targets, as well as changes in ownership structures to the benefit of the IOCs. Nonetheless, BMI believes that Iraq’s ambitious plans for its oil and gas sector present significant investment opportunities for foreign companies. Specifically, we have identified the country’s oil services sector, refining segment and natural gas industry as particularly attractive opportunities. We have highlighted below not only the nature of these opportunities, but the three most important risks that foreign investors will face in the Iraqi energy sector in the coming years.

The full report runs to 43pages, and is available at a price of £525 directly from Business Monitor International.