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The Iraqi Ministry for Municipalities and Public Works has chosen Veolia to build and operate for five years a desalination plant in Basra, Iraq. For Veolia, this contract represents cumulated sales of $115 million.

Limited water resources and conflict over its use have made water a crucial resource for Iraq's development, especially in the country's south. Water in this part of Iraq is mainly sourced from the Euphrates, which has a high salt content, and water from the Persian Gulf.

Under this new contract, won in partnership with Japanese conglomerate Hitachi and Egyptian engineering firm ArabCo, Veolia will build and operate a desalination plant with an ultrafiltration unit and reverse osmosis membranes.

It will produce 200,000 cubic meters of drinking water a day. The technology used will reduce the salt content in the drinking water producedfor Basra's population of 2.3 million people. Additionally, in a country with a chronic shortage of electricity, this desalination plant will be completely autonomous as it will have its own electricity generators to guarantee continuous service.

Construction work on the plant is due to commence in the first quarter of 2014 and should be completed within 30 months. This contract will also create 300 jobs for the construction of the desalination units, provided by ArabCo, and 50 jobs for the facility's operation for five years.

Antoine Frérot, Chairman and CEO of Veolia Environnement, said:

"This new contract that we have won in Iraq is further proof of Veolia's ability to deliver concrete and reliable solutions to the scarcity of water resources and the challenges facing large cities, especially in countries where water is crucial to economic development ... I am delighted that Veolia has been chosen by the Iraqi authorities to support the modernization of Basra, and that the company is able to provide a solution to the challenges confronted by this city, a leading center for the oil and gas industry."

As part of its reconstruction, Iraq has launched several national plans aimed at modernizing basic services, such as water, wastewater, waste treatment and energy, in order to support its economic growth. With the country's sole access to the sea, Basra is the subject of special attention from the Iraqi government, which is modernizing this port city to speed up its economic growth.

Jean-Michel Herrewyn, Director, Global Enterprises, Veolia Environnement, explained:

"This plant is part of a comprehensive plan to rehabilitate and extend the city's water treatment plants. The innovative technology and solutions we are providing Basra will enable it to improve its citizens' access to quality drinking water while protecting its resources."

(Source: Veolia)

(Picture: Veolia Water, at Basra Oil and Gas exhibition)

By Robert Tollast.

Robert Tollast is a consultant at Noorbridge, a Helsinki based consultancy with staff in London and Nasiriyah, Iraq. He has written extensively on security, politics and economic issues in Iraq for various publications, and is currently researching a modern history of Iraq with support from The Middle East Forum. email: [email protected] twitter: @roberttollast

As Iraqi troops continue to fight the Islamic State of Iraq and the Levant in Fallujah and Ramadi, a different kind of battle is brewing 350 miles to the southeast, one that could prove just as decisive for Iraq’s future. In Basra this year, the province has more cause for more hope than in previous years. Here’s why.

The dawn of strategy

At the end of 2012, Colin Freeman reported a story in The Telegraph that made for depressing reading: Britain was closing its consulate in Basra, just as the province was experiencing a surge in foreign investment from all over the world.

Last month I spoke to a former British diplomat and asked him why this was, and he remarked that security costs- around £6m per year, were the equivalent to several embassies. But that wasn’t the only thing keeping the British away.

Another factor that has often deterred foreign investors is of course bureaucracy and the difficulty of getting your business on the ground because of Iraq’s fondness for red tape. Discouraging contractual terms offered to investors have put a stop to many potential ventures, as someone with years of experience in the country recently told me, “Iraq is good at killing the goose before it lays the golden eggs.”

But things might be about to change. Last week, Freeman published another story in The Telegraph reporting that Basra governor Nasrawi had hired the British firm Aegis Defence Services to institutionalise the latest counter-terrorism practices for the province.

Governor Nasrawi (from the Islamic Supreme Council of Iraq) seems to understand what counter-terrorism involves, remarking in a recent al-Monitor interview that CT was not primarily a conventional military task. The fact that he has invited a British general who was involved in the invasion is certainly an interesting story.

But Nasrawi (elected last April) is also keen to make progress in other areas. He recently hired American firm Hill International on a long term contract to oversee strategic planning and contracts with foreign companies. As he asserted in the al-Monitor interview, Nasrawi appeared determined that Basra was going to beat corruption, short termism and develop a strategy. Out with four year plans, and in with long term goals.

By John Lee.

The Iraqi-Extractive Industries Transparency Initiative (IEITI) report for year 2011 has been published by an independent and international reconciler firm Ernst & Young.

The report considers for the first time the quantities of crude oil used for local consumption and the paid revenues by the Extractive Oil Companies (National & International).

It concludes that the total revenues from selling crude oil for year 2011 amounts to US$ 83 billion, plus the total paid amounts of US$ 4.5 billion to the International Extractive Companies involved in developing oil fields, and US$ 4.5 billion to the National Extractive Companies in exchange for their participation in the extractive operation of the oil fields in Basra, Umara, Nasiriyah, Kirkuk and others

The International Reconciler concluded that there was a total difference of US$ 1.175 billion between the data reported by the Oil companies compared to those of the Ministry of Oil (MoO),the difference was in favor of MoO; furthermore, a difference of US$ 720 million was also reported in respect to other costs in favor of MoO.

The report clarified that all discrepancies are explained and justified and were due to the difference in the calculation mechanism used by MoO compared to thatused by the Oil Companies. The report summarized the results of the reconciliation process between the Companies and the Iraqi Government (excluding Kurdistan Region) as being 100% comparable, based on adopting a Materiality figure of 1%.

Other challenges faced by the reconciliation process were the inability to reconcile the data information of oil production in Kurdistan Region with the information of data of crude oil consumption by the Electricity Power Generation due to the absence of supplying data by neither the Kurdistan Regional Government nor the Ministry of Electricity.

The full report can be downloaded here, while our Expert Blogger Ahmed Mousa Jiyad gives his initial assessment here.

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

Iraq is not attracting domestic capital belonging to its citizens. Inadequate economic and investment policies in addition to widespread corruption have contributed to a new migration of Iraqi capital. This time, capital is going to Georgia, which provides much assistance for those who want to invest in the country.

The head of the Federation of Iraqi Chambers of Commerce, Jaafar al-Hamdani, a businessman and investor, told Al-Monitor that Iraqi capital — valued at billions of dollars — has began moving toward other countries such as states of the [former] Soviet Union, including Georgia, which is now attracting a lot of capital from Iraq.

This shift of capital, according to Hamdani, can be attributed to investment and banking facilities that owners of Iraqi capital find in Georgia; such facilities are not available in Iraq.

For its part, the government admits that the capital found inside Iraq is "weak" compared to the capital that has left the country, in light of the security situation, the decline in the labor market and decreased investment opportunities.

In a telephone conversation with Al-Monitor, Abdul Hussein al-Anbaki, adviser to the prime minister for economic affairs, explained, "The migration of Iraqi capital did not start after US troops entered the country in 2003. Rather, it began in the 1980s, when the former regime split profits with the private sector."

Anbaki pointed out, "The migration of Iraqi capital that occurred after 2003 was due to the deteriorating security situation in the country and the lack of employment opportunities as well as the absence of a legislative or physical environment, or even infrastructure."

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.

Clash in the Desert: Karbala’s Tomato Farmers Versus Iraq’s Biggest Airport.

The authorities in the religious boom town of Karbala plan to build the country’s biggest airport on the city’s outskirts. But to do so, they will have to confiscate land from hundreds of farmers, who live a basic lifestyle but provide the city with its food. After protests and threats of eviction, the question remains: which is more important - vegetables or planes?

They are poetically known as the “farms of the desert” and there are hundreds of them on the outskirts of Karbala, in southern Iraq. They stretch from the outskirts of Karbala to the outskirts of the nearby city of Najaf and most of the farmers living and working on them have fairly basic lifestyles.

An estimated 300 families, many of them refugees from Iraq’s decimated southern marshes, work on this 60 kilometre by 12 kilometre stretch and they are proud of what they eke out of the desert. They are also proud of their own self reliance in an area where there are barely any paved roads, schools or even electricity in the houses.

“We produce this food all by ourselves,” says one of the farmers, Ammar, who is 40. “We do not receive government support or subsidies in any form, neither seeds, nor fuel nor infrastructure. We live a fairly primitive life out here but we are not complaining. We are happy with our lives. We don’t want salaries or government jobs or public services. We just want to government not to be hostile towards us.”

Unfortunately Ammar is unlikely to have that wish granted. In 2009 the local government and the federal Ministry of Transport laid a foundation stone nearby that was to be the start of a new airport for Karbala. The Imam Hussein airport – named after the Muslim icon that draws many visitors and pilgrims to his Karbala shrine – will cost an estimated US$2.5 billion to build and should serve around 20 million passengers a year. Plans have been drawn up and the Iraqi government has invited contractors to tender for the construction work.

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

The year 2013 registered high levels of commercial exchange between Iraq and Iran, which reached — according to both Iraqi and Iranian officials — more than $12 billion. This comes at a time when the Iraqi government aspires to increase trade between the two, with a goal of $15 billion.

In a telephone conversation with Al-Monitor, adviser to the Prime Minister for Economic Affairs Abdul Hussein al-Anbaki explains that the most common goods imported from Iran to Iraq are canned food — including canned cheese and dairy products — as well as soft drinks, meats, vegetable oil, household items and electrical appliances.

The Iraqi government hopes that this trade increase will strengthen Iraq’s role in ensuring stability in the region in light of the economic and political influence of Iran. Iraqi Prime Minister Nouri al-Maliki’s media advisor, Ali Musawi, told Al-Monitor that Iraq was striving to strengthen ties with all neighboring countries, without exception.

He noted that Iran has had an important weight in economic transactions with Iraq, notably since 2003, and pointed to the ease of commercial exchange between the two countries in terms of transportation and quality of goods, among other factors. Thus, according to Musawi, it is only normal for the two countries' commercial exchanges to increase.

For his part, the head of the Commerce Department in the Iranian Embassy in Baghdad, Mahmoud Bahzar, told Al-Monitor that Iran hopes to have $20 billion worth of commercial exchanges with Iraq by the end of 2017, saying, “According to our market observations, commercial exchange reached $10-13 billion by the end of November 2013.”

A high-level Jordanian delegation headed by the Prime Minister of Jordan, Mr. Abdullah Alnusur, arrived on December 25th accompanied by eight ministers and a number of senior advisers. The delegation was received at the airport in Baghdad, by Foreign Minister Hoshyar Zebari and Minister of Youth and Sports.

A formal reception took place at the Government Palace, where the visiting delegation was received by Prime Minister Nuri al -Maliki and a number of ministers, as the national anthem played and the guard of honor reviewed.

Official talks held with the participation of the ministers concerned , especially Foreign, Internal , Industry , Trade , Planning, Agriculture, Energy, Works and Housing and Transportation.

They reviewed pipeline project to export Iraqi oil through Jordanian territory to the Gulf of Aqaba and Jordan's needs of crude oil and electricity interconnection and railway and cooperation in the areas of air transport, facilitating the procedures and the entry of Iraqi citizens as well as Jordanian goods and agricultural products. They also discussed the prospects for security cooperation and the fight against terrorism.

A news conference held at the end of the talks the by the prime ministers of the two countries. The Iraqi Prime Minister to held luncheon invitation in honor of the visiting Jordanian delegation .

(Source: MoFA)

The Chief Representative of Japan International Cooperation Agency (JICA), Shohei Hara, met with the Head of the Department of Foreign Relations, Minister Falah Mustafa, on Tuesday to discuss JICA’s new projects in the region as well as other areas of mutual interest.

The meeting was also attended by the Assistant Head of the DFR, Siham Jabali and JICA Senior Program Manager, Jalal Abdullah Sendory.

JICA is a Japanese independent government agency conducting humanitarian projects in the developing world. The agency started its operation in the Kurdistan Region by opening their office in 2009. They now, have an office in Baghdad as well.

Minister Mustafa welcomed Mr. Hara to Kurdistan and thanked him for the development projects that JICA has initiated in the Kurdistan Region. Minister Mustafa said, “JICA has been a great representative of Japan and your contribution is of great sentiment to the KRG.”

Mr. Hara briefed Minister Mustafa on the agency’s recent activities in Kurdistan. Currently JICA is financing three large projects in the field of infrastructure, two in the electricity sector and one in the water sector. Further projects are planned.

The Minister informed Mr. Hara of the Kurdistan Regions open-door policy. The KRG welcomes economic, political as well as cultural ties with all countries and would like to see a relationship with Japan flourish. “Your presence in the Kurdistan Region is important as we can mutually benefit from one another.”

Due to its security and fast growing economy, Kurdistan presents Japanese companies with endless opportunities. In return, the Region would benefit from Japans experience and their know-how.

(Source: KRG)

By Ahmed Mousa Jiyad.

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

Recent information on Satarem sheds serious doubt about its prospects and ability for executing the Missan Refinery project.

Iraq’s Ministry of Oil signed, in the presence of the Prime Minister Mr. Nuri Al-Maliki, a memorandum of understanding (MoU) with Swiss firm Satarem (represented by what was reported as Chief Executive Jerome Friler) on 10 October for the development of a 150 kbd refinery in Missan province at an estimated cost of $6 billion.

Almost a year ago I received communication from a consultant with a California based financial firm enquiring about Missan refinery and stating “For the last year or so, I have been working with an Iraqi group, developing the [Missan] refinery complex”. A few weeks later I received communication from an Iraqi law firm in Baghdad indicating they were “Advising on [Missan] refinery construction”. The two communications might be connected!

When reviewing information on the signed MoU, I assumed the above mentioned financial and legal firms were involved in the project. But soon afterwards the California based consultant informed me they were not, adding further, “We are of the opinion that the sovereign and financial payment extension risk in Iraq is too high to justify any investment from [….], at this time.”

Most of the comments reported within business, professional and media circles since the signing of the MoU are that Satarem is not known to be a refinery-specialized firm, or to have a track record in modern refinery construction. I did not find information on this company in the “Public Companies” or “Investment Fund Group” of the SEDAR company database.

By John Lee.

Iran is to increase its electricity exports to Iraq by an additional 500MW.

According to a report from PressTV, the Iranian Energy Minister Hamid Chitchian (pictured) said:

“The first outcome of these accords is the increase of electricity exports by 500 megawatts (MW) in addition to previous agreements reached with the country .... The agreements we have reached with Iraq are about the two issues of more electricity exports and the expansion of activities of Iranian companies in the country.”

(Source: PressTV)