Bloomberg and Reuters report that Iraq has invited foreign companies to compete for a $450 million monorail project in the southern holy city of Kerbala [Karbala].

The city, 80 km (50 miles) southwest of Baghdad, hosts the shrines of two Shi’ite imams and hosts millions of Shi’ite pilgrims each year at several major religious rites.

The head of the Kerbala Investment Commission, Taif Abdul-Hussein [Taief Ali], said on Sunday the 18-km (11-mile) monorail would be built from a northern entrance to the city to the main Shi’ite shrines in the central area and then towards the northeastern city entrance.

The train would be capable of speeds up to 100 km per hour and the line would have 18 stations, situated about 900-1000 metres apart. The last station would be about 200 meters from the Imam Hussein and Imam Abbas shrine.

Lebanese, Iranian and Gulf companies have expressed interest in the project.

In June 2010, the southern city of Najaf awarded TransGlobim International, a privately-owned Canadian consortium, a $600 million contract to build the country’s first monorail.

In January 2011, France’s Alstom signed a memorandum of understanding to build metro line above Baghdad’s streets.

(Sources: Bloomberg, Reuters)

AKnews reports that over 16 million pilgrims flocked to Karbala to mark Arbain, the 40th day after Ashura, which is the day Shiite’s believe Imam Hussein Ibn Ali was martyred in the 7th century.

The deputy leader of the Karbala Provincial Council Nassif, Jassem al-Khutabi, told AKnews that over half a million come from abroad, including from Europe, America, Australia, Iran, India, Saudi Arabia, Kuwait, Oman, Bahrain and Afghanistan.

Khutani called on the federal government and the Iraqi Council of Representatives to vote on Karbala City’s request to form a special body to deal with the millions of visitors to Iraq.

“The visitors need security and services that Karbala and other popular provinces cannot manage without the cooperation of their neighbors.”

(Source: AKnews)

A new railway line between Karbala and Musayyib [Musayyab] was opened this week by the Transport Ministry, reports AKnews.

The new line was opened in Babil and Karbala Provinces just to the south of Baghdad, to transport Shiite pilgrims marking the 40th day after Hussein Ibn Ali was martyred. Around 8,000 people are expected to be traveling from Musayyib to Karbala for the ceremonies.

The federal government had allocated 5 billion IQD ($4.2 million USD) to provide services, including transport, to visitors.

The chairman of Karbala Provincial Council, Mohammed Hamid al-Moussawi, told AKnews the Ministry wants to reduce road traffic when pilgrims return to their homes after the ceremonies.

“The most significant problem for Karbala is transferring the visitors to their provinces at the end of the visit, although new railway lines have been opened and several Iraqi ministries including Trade, Transport and Defense participate in the transport process.”

“The government in Karbala began building a modern road network last year to link the Province with its neighbours. The Ya Houssein road cost 50 billion IQD ($42.8 million USD) and was paid for by the Iraqi Council of Representatives. It will reduce traffic on the main roads that connect Karbala to Baghdad, Babil and Najaf Provinces, and it is scheduled to be completed this year.”

(Source: AKnews)

[Picture: Musayyab – Karbala railway]

Iraq’s National Investment Commission (NIC) announced on Monday the details of the new Kerbala Monorail, and invited interested parties to contact them:

1. Length of the line (18 KM)
2. Project Type (Monorail) – High Concrete mono rail of two ways known locally as Kerbala Monorail.
3. Number of stations (20) the distance between each station and another (800- 1000M)
4. In the first stage, the line shall connect the Visitors City – Baghdad road, Al- Bedaa railway station, Bab Baghdad area, Tweredg road, the university, Ibrahemiah and the Visitors’ road of Babylon Gate.
5. The successive coming of the trains to the stations must take (1-2) Minutes
6. Maximum train speed 90 km/hour
7. Number of vehicles for each train (4-6)
8. The electrical power is to be provided by the project generators only.

Willing investors can submit their technical, economic offers and the funding plans with filling up the investment application form available on NIC website and enclosing all documents required (mentioned in page No. 7 of the same application) and send it either directly to the NIC premises or to the email:

oss@investpromo.gov.iq .

Notice: applications can be submitted within one month from the date of publishing this announcement.

Karbala relies heavily on Iranian pilgrims to important religious sites in the area. But hotel owners are crying foul: they say Iranians are openly monopolizing tourism in Karbala and covertly buying up local properties, according to this article from Niqash.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Every week the central Iraqi city of Karbala hosts thousands of visitors, most of them on religious pilgrimage from Iran and on their way to visit some of the most important destinations in the world for Shiite Muslims, inside and around the city. Most of the Iranians are on package tours and spend time in Karbala, Najaf and in Baghdad.

One might logically conclude that the Iraqis working in the tourism sector in these cities would benefit financially from their Iranian visitors. However many local tourism operators in Karbala say that one Iranian firm, with a virtual monopoly on Iranian tourism to the area, is making all the rules and all the profit.

Founded in 2003, after the fall of former Iraqi leader Saddam Hussein’s regime, Shamsa, which is described as a central agency for Iranian pilgrimages to Iraq, has over a thousand branches all over Iran. And as such, Iraqi hotel owners and tourism operators in the Karbala area say that Shamsa is directly, and indirectly, monopolizing religious tourism in their country. “Due to this company’s cunning methods, a huge amount of the revenue from Iranian visitors is just going back to Iran,” they complained.

There are around 300 hotels in Karbala, many of them concentrated in the city centre near two important shrines. And almost all of them make their money from Iranian tourists. Statistics indicate that tourism is the major source of income in the area. Some private citizens in Karbala also get in on the act, providing accommodation in their own homes – however in general, these do not meet the standards set by Shamsa and are used by individuals travelling privately.

Lafarge plans to triple cement production over the next two to three years at its plant in Karbala, according to Bloomberg.

Eric le Blan, Acting Chief Executive Officer of Lafarge’s partner MerchantBridge, told the agency that production at Karbala would increase from 576,000 tons of cement per year to at least 1.8 million tons by 2013 or 2014.

Demand for building materials in Iraq is expected to increase dramatically as the country develops its infrastructure and build 2.5 million homes by 2015. Annual demand for cement in Iraq is about 20 million tons at present and is expected to rise to at least 35 million tons by 2015, versus current domestic production of about 5 million tons a year.

The company expects to start breaking even in January.

MerchantBridge completed a $220 million deal with Lafarge in 2010, the world’s biggest cement company, under which they took over the Karbala plant on a 15-year lease from the government. Production at the time was about 300,000 tons.

MerchantBridge plans to pursue additional investments in Iraq next year, including in the electricity market, where multibillion dollar projects are under way to help resolve power shortages, le Blan said.

(Source: Bloomberg)

The Iraqi Oil Ministry wants to build two new refineries in the provinces of Karbala [Kerbala] and Missan [Maysan], in order to reduce the country’s dependency on foreign oil imports, according to AKnews.

The one in Karbala will produce up to 140.000 barrels of fuel per day, the one in Missan up to 150,000.

The announcement comes one day after the Oil Ministry reported that Iraq is still not able to produce enough oil and gas to meet its own demands. While Iraq produces 8 million liters of liquid gas per day, it consumes approximately 12 million liters.

The situation is even worse as far as oil is concerned: 12 million liters of refined oil are produced in Iraq every day, however another 12 million liters have to be imported from international markets.

In a move that some regards as a panic reaction, the Oil Ministry this weekend halted its programme to provide free fuel to owners of generators. The programme started in June in order to increase private energy production and cost $400 million [468 billion Iraqi dinars].

(Source: AKnews)

(Picture: Baiji refinery)

Levels of violence rose in Iraq for the fourth week in a row last week, with a number of people killed and injured in nationwide attacks. Violence was concentrated in Baghdad, Mosul and the districts surrounding the capital. As warned in last week’s Security Update on Iraq Business News there were several attacks conducted against predominantly Shi’ah parts of the country, including the holy city of Karbala, as religious worshippers observed the anniversary of the death of revered cleric Imam Sadiq on 23 September. There was also a spike in kidnappings last week, with eight people abducted around the country, although some may simply have been murdered rather than taken for a ransom exchange. Those kidnapped include three Christian men abducted on a hunting trip in Ta’mim province, two Yazidi civilians taken from Ninawa province and three Bangladeshi women kidnapped in Diyala province. AKE will be issuing its next quarterly kidnap report at the beginning of October. If you would like a free trial of the service please enter your details here.

Weekly Violence in Iraq - the last 6 months

North

Turkish and Iranian military operations continue around the borders of Kurdistan, but there were no reported casualties or damage as a result of their activity last week. The confrontation between Ankara, Tehran and the Kurdish rebels based in the Qandil Mountains does not look set to ease any time soon with a number of attacks on Turkish interests in recent weeks and an agreement between Iran and Turkey to co-operate on the matter. Previous years have seen fighting continue until winter conditions make fighting almost impossible in the mountains.

Centre

Levels of violence have risen in the central provinces to the highest level seen in 10 weeks. As warned, terrorists conducted a number of attacks against Shi’ah civilians over the past week, with the normally quiet province of Karbala amongst the targets. While responsibility has not yet been claimed the attacks may have been conducted by radical Islamist groups from a Sunni background intent on stirring up sectarian tensions; government sources believe this to be the case. The attacks may have been timed to coincide with a Shi’ah religious event on 23 September (25 Shawwal) which marked the anniversary of the death of revered figure Imam Sadiq, although the Karbala attacks took place two days later. Baghdad also saw an increase in the number of targeted shootings against ministry employees and senior members of the security forces. Businessmen were also targeted in suspected criminal attacks in some parts of the capital. Local national employees are advised to exercise caution and remain on guard.

South

There were no major developments recorded in the south of the country last week and it remains far quieter than the central and northern provinces, which should be particularly encouraging for the many companies looking to move into the region to do business. However, the lack of incidents and distraction of more mundane issues such as a lengthy visa application process should not lead to any complacency on behalf of those responsible for the health, safety and security of an organisation operating in the region. Sporadic terrorist attacks, kidnappings and other militant and criminal activities will continue to occur.

John Drake is a senior risk consultant with AKE, a British private security firm working in Iraq from before 2003. Further details on the company can be found here while AKE’s intelligence and political risk website Global IntAKE can be accessed here. You can obtain a free trial of AKE’s intelligence reports here. You can also follow John Drake on twitter here.