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

None of Iraq’s political factions —or officials and others with political, economic or security influence — will truly answer the question: “Have you erred?”

Sometimes their response is generalized and clichéd, such as: “Perfection is left to God alone.” This in itself is pure prevarication, because it points to a lack of desire to admit wrong, and precludes any readiness to apologize for mistakes.

Since 2003, Iraq has been on a path strewn with mistakes that have reduced its forward momentum to a crawl filled with pitfalls. Yet, not one official has ever come close to apologizing for errors committed, to a point where the trend has become akin to an institutionalized political tradition.

This article was motivated by the abject failure of Baghdad’s authorities to protect the city from being flooded after only 48 hours of rainfall. Their ready excuse is that the design of the sewer system is unable to cope with rainfall amounts that exceed those prevalent 40 years ago!

Such an example is worthy of study. It is an indicative example of utter failure that reflects a denial of responsibility by city officials who, instead, consign its causes to mistakes committed by past administrations.

Electric power generation has increased in Iraq during the past few months, but transmission grids that transport electricity to homes were built 30 years ago: another ready excuse for the continued daily power outages.

The Iraqi government signs shady deals worth millions of dollars to buy ineffective explosive-detection devices, as well as defective weapon systems and equipment lacking the necessary complementary technologies. In all that, the justification is that “Iraq is passing through exceptional circumstances, and has fallen prey to internal as well as external conspiracies! Furthermore, low-level government employees and politicians have been tried for corruption as a result of those deals.”

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Making Themselves at Home: al Qaeda Ups Mafia-Style Extortion in Mosul

The northern Iraqi city of Mosul is well known as the base of Sunni Muslim extremists, Al Qaeda, in Iraq. But recently the militants have been stepping up their terrifying game, charging more and more “protection money” from an increasing range of individuals and businesses, and threatening and bombing any who refuse.

Recently there was a bomb blast at what is for some people in the troubled northern Iraqi city of Mosul, a piece of recent history. The owner of the Sama shopping mall in the Arabi neighbourhood, constructed at the cost of US$ 1 million and the first shopping mall to be built in Mosul, had refused to pay the “terror tax” that the local branch of Al Qaeda was demanding. The extremist organisation’s answer: On Oct. 23 a bomb, which resulted in 19 serious injuries and deaths.

On the very same day, the organization – known as the Islamic State of Iraq and the Levant, ISIS for short, or Daash – also bombed a restaurant. Apparently the owner of the Happy Restaurant in Mosul also had not paid the right amount to the extremist extortionists.

These unfortunate business owners are some of the small number who are refusing to pay the “protection money” that the Al Qaeda affiliates are demanding. Everyone else is paying up, say Mosul locals.

This sort of behaviour is nothing new for Al Qaeda – they have been extorting money from Mosul’s people for years, ever since 2004 in fact. The difference in the most recent threats and blackmail is that Al Qaeda is spreading the net wider and putting the prices higher, says a local writer Abdul Qader Mohie Saeed. For the first time, they are targeting mosques in the west of Mosul, schools, university professors and the owners of power generators; the latter are the owners of diesel fuelled power generators and locals pay for their use during breaks in government-supplied electricity (of which there are many).

By Yasmine Khaled Aly, UNIDO.

Before learning about UNIDO’s Investment Promotion in Iraq (IPI) Project, Anwar Hussein – a young, ambitious and hardworking Iraqi – had a small business but few business opportunities. With IPI's help, Anwar’s business, and life, have changed.

Like many young entrepreneurs in Thi-Qar, Anwar wanted to start a business where there was a market need. Seeing a shortage in agricultural maintenance services in the city, he started a small repair workshop of 30 square metres for agricultural machinery; with only six employees and annual revenue of USD 50,000.

A few years on, Anwar’s long working hours and diligent self-learning efforts have paid off. He has earned a good reputation for the quality and accuracy of his work.

However, as the business slowly grew, and despite his diligence and continuing hard work, he was no longer capable of managing internal problems and heavy daily operations. He simply did not possess the delegation or business management skills to handle expansion. As a result, Anwar found it difficult to generate bigger business opportunities for the workshop.

It was not until Anwar joined the business courses at the Enterprise Development Centre (EDC) – a joint initiative between UNIDO’s IPI project and the Chamber of Commerce in Nassiriya – that his vision and his business started to expand. At EDC training courses in Thi-Qar, Anwar was able to hone his skills in business management, time management, customer service, marketing and finance. More importantly, he learned how to lead teams and delegate responsibilities within a larger operating business scheme. Consultants at EDC also coached him in how to get a loan and expand his enterprise.

By John Lee.

BGR Energy Systems has signed a contract with the Ministry of Electricity for engineering, procurement and construction (EPC) of four 125-MW gas-fueled power project at Nasiriya.

The Economic Times reports that the contract is valued at $246 million and includes the scope of engineering, procurement and construction services of BOP, civil works and erection, testing and commissioning of gas turbine-generator sets supplied by General Electric, as well as, operation and maintenance of power project for six months.

BGR Energy Systems Limited is listed at the Bombay Stock Exchange and National Stock Exchange. The Company was originally incorporated in 1985, as a joint venture between GEA Energietechnik GmbH, Germany and B. G. Raghupathy.

(Source: Economic Times)

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

Iraqi Prime Minister Nouri al-Maliki, in an exclusive written interview with Al-Monitor, said that Iraq supports a “transitional government that will manage affairs until elections are held and a constitution is adopted” in Syria.

Maliki, who opposed a US strike on Syria and any outside military intervention there, said that he told US Vice President Joe Biden two years ago that Syria “would not be resolved in two years, or even more, and that the social situation, the political and population structure and the sensitive region make it difficult to predict the end of an armed conflict of such cruelty and ferocity.”

The prime minister, whose term ends in 2014, said that the rise in terrorism in Iraq is rooted in the rise of regional sectarianism and “directly related to the developments in the Syrian crisis and its repercussions on the Iraqi arena. We are very worried about the Syrian arena transforming into a field that attracts extremists, terrorists and sectarians from various parts of the world, gathering them in our neighborhood.”

Maliki said, "Our relationship with Turkey was stronger than our relationship with Iran." He added that Turkey “has been inclined to openly intervene in Iraq's affairs. This caused sectarian provocation, when [Ankara] stood with the Sunnis against Shiites. These cases have provoked the Iraqis and resulted in backlash against [Turkey]. We have asked the current Turkish government many times, both directly and indirectly, to go back on this approach. We still hope that Turkish officials will review their positions so that our relations can improve and grow.”

Iraq's Prime Minister said he is "optimistic" about US-Iran ties and serious about preventing the flow of weapons to Syria.

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.

The project designed to distribute the country’s oil revenue surplus directly to Iraqis is once again at the forefront of recent events, as political blocs have begun to prepare for the general elections next year. This comes amid fears that it may lead to additional inflation in the country.

Legislative elections are expected to be held in March 2014 in Iraq, even though parliament has not yet voted on the electoral law. Meanwhile, the Independent High Electoral Commission said that it needs six months to complete the preparations for the 2014 elections, starting from the moment the law is passed.

Speaking to Al-Monitor, Bassem Jamil Antoine, an Iraqi economic expert, estimated that “each Iraqi citizen will be allocated nearly $50 a month from the oil revenue surplus,” provided that “the project's implementation is preceded by filling gaps in the budget and increasing oil exports.”

The Iraqi Ministry of Planning announced in March that “25% of the budget surplus will be distributed to the citizens soon, retroactively for 2012 and 2013.”

Antoine said it was more likely that “the budget surplus in Iraq reaches $10 billion per year,” on the condition that “the general budget deficit is filled, exports increased and oil production raised.”

According to Antoine, “the budget surplus will provide every Iraqi citizen with a monthly income ranging between $30 and $50.” He explained, “This figure will exceed $50 if distribution is limited to poor families or those who fall under the poverty line.”

The United States Department of Energy’s (DOE) Office of Electricity Delivery and Energy Reliability conducted a workshop in Baghdad, September 22-26, on electricity operations and maintenance for 20 engineers from the Ministry of Electricity who work at power plants across Iraq.

The five-day workshop provided the Iraqi participants with tools and methods to enhance efficiency and safety in the generation, transmission, and distribution of electricity.

This workshop was the final training session of the Department of State-funded Iraqi Energy Reliability, Survivability, and Resiliency Program. The program supports the U.S.-Iraq Strategic Framework Agreement (SFA), with the specific goal of facilitating the Government of Iraq’s capabilities to deliver essential services to its citizens.

In its entirety, the Iraqi Energy Reliability, Survivability, and Resiliency Program trained 90 Iraqi engineers, provided the Government of Iraq with the tools to identify vulnerabilities within the electricity sector, and proposed international industry best practices to address those vulnerabilities.

The U.S. Department of Energy provided trainers from its headquarters in Washington, D.C. and from the Pacific Northwest National Laboratories in Richland, Washington who are experts in turbine theory, electricity sector operations, and maintenance.

(Source: Embassy of the United States)

By Walid Khadduri for Al-Monitor, translated from Al-Hayat. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

On Sept. 14, 2013, the Iraqi parliament's Oil and Energy Committee published a report drafted by the advisory board of the Prime Minister's Office, which indicated that Iraq is losing around $40 billion annually due to the lingering power outage crisis.

The report confirmed that the continuous power outages caused serious damage to petrochemical plants and private plants. It is worth mentioning that for years now power outages in Iraq have shot up from 15 to 20 hours per day throughout the year, with the exception of the Kurdistan Region of Iraq, where the private sector participates in electricity generation and distribution.

It is true that power outages have become a part of daily life for Iraqi citizens, but their far-reaching implications go beyond significant material losses. The continuous blackout has led to the use of generators at homes and in neighborhoods, causing severe environmental pollution. Moreover, constant and sudden outages damage household electrical appliances such as refrigerators, computers and televisions.

These losses may have been borne by the citizen and not the state as a whole, yet they are significant cumulatively losses for the country, both at the moral and material levels. Besides pollution, Iraqis pay hundreds of dollars for generators and fuel, in addition to the state electricity bills.

Why this dire situation in the electricity sector in Iraq and other Arab countries? Why is this happening at this particular stage and not in the first stages of use of electricity in the Middle East, that is, decades ago, after World War II? Does Iraq — and other countries witnessing the same tragic experience — lack the necessary funds for the construction of power plants? Of course not. The main reason lies in the dissemination of a culture of corruption and lack of accountability, which spread to senior officials in the Iraqi state.

By John Lee.

Genel Energy and DNO International have signed a Gas Sales and Purchase Agreement with the Kurdistan Regional Government to supply gas from the Summail field in the Dohuk licence in the Kurdistan Region of Iraq.

The gas will partially displace diesel currently used to generate electricity in a 500 MW power plant in the city of Dohuk (pictured), located 40 kilometres from the field.

Initial deliveries will be around 100 million cubic feet per day sold on a take-or-pay basis for the duration of the Production Sharing Contract or until deliveries reach one trillion cubic feet. The price of gas will range between $3 and $4 per thousand cubic feet over the life of the contract.

The Prime Minister of the Kurdistan Regional Government, Nechirvan Barzani, and the Minister of Natural Resources, Dr. Ashti Hawrami, were present at the signing ceremony held in Erbil today and are signatories to the contract.

The next step in the fast-track development of the field is re-entry and completion of the Summail-1 discovery well and the installation of a 24 inch pipeline to transport gas to what is slated to become the regional gas gathering and distribution network. First gas from Summail-1 is planned in January 2014. The second well, Summail-2, will spud in the fourth quarter and the Summail-3 well is scheduled for 2014.

Following the development of the Summail field, the focus will shift to the appraisal of the oil potential of the Dohuk license.

By Waheed Ghanim.

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Back On The Street In Basra: Oil Workers Demonstrate Again

Earlier this year oil sector workers in Basra began demonstrating for better conditions and the oil dividends they were promised. Their employer, South Oil, which produces most of Iraq's oil, said they would accede to the demands. However nothing has changed and now the workers are back on the street.

In February employees of South Oil, the national petroleum company responsible for oil in Iraq's southern states, stopped work and demonstrated in front of the firm's headquarters. The workers demanded payment of withheld benefits, the right to housing, better contracts and an end to corruption in the company. The protests started in February and in April around 1,000 workers even stormed the company headquarters in Basra.

And recently the oil workers returned to the streets of Basra to continue their fight. The latest protests started because one of the protest leaders, Alaa Abdul-Rida, was transferred to another location.

To defuse the crisis, local government had formed a committee that included two local MPs, to negotiate some kind of settlement. “But even while negotiations were going on between the committee and the Ministry of Oil [South Oil's parent company], we were surprised to find out that Abdul-Rida had been transferred to another oil field, without a new title or any financial compensation,” explains Abdul Karim al-Sada, another of the protest leaders. “It seemed that the transfer was a punishment.”

But al-Sada felt that those tactics wouldn't have any effect on the protesters. “During previous protests, eight of the protest leaders were detained – myself included. But pressure from the other protesters meant that the case was dropped,” he says. “After all, we are demonstrating peacefully and we don't have any intention to stop oil production.”

The oil company has previously said it is prepared to meet the workers' demands. In fact, it was already saying that early in 2013. But as al-Sada confirmed, the issue of housing and the issue of company dividends is yet to be resolved. The workers also want improved conditions at work and that a trade union be introduced.

At a press conference, the head of South Oil, Dia Jaafar, said some of the workers' demands were luxuries but that others were important and immediate. “However,” he added, “some of these are not within my control. But the Minister [of Oil] understands these demands and he's working on making them a reality.”

In Iraq, salaries paid to oil sector employees and locals working in the electricity sector are higher than any other industry, mainly because there are incentives available that cannot be obtained in other areas. The demonstrating oil sector workers counter this by saying they often work in extreme conditions in hot and remote places, where security is a grave concern.

Nasser Majeed Hassan, a former member of the South Oil trade union between 2003 and 2007, says that many of the current problems causing the protests are the fault of former oil minister, Hussein al-Shahristani, when he banned the oil workers' trade unions.

“We formed trade unions under very difficult conditions in 2003,” Hassan notes. “We were visiting the sites, even in remote areas and at great danger, so that we could check out working conditions and to identify corruption there. But high ranking officials fought us all the way.”

The oil workers also say they believe that the rest of Iraq should listen to what they have to say because it is about how national oil incomes are distributed; these methods of distribution affect everyone in the country, because that's where nearly all of Iraq's income comes from.

(Source: Niqash)