LONDON, May 23: European and Asian firms turned out in force on Friday to press their case for Iraq rebuilding work at a meeting organized by US construction giant Bechtel.
More than a thousand hopefuls crammed inside a London hotel, forcing organizers to enlarge the conference room to accommodate them all.
Outside between 20 and 30 opponents of the US-led war in Iraq chanted: “Vultures, vultures”.
Friday’s meeting in London came hard on the heels of a similar gathering in the United States. The roadshow will move on to Kuwait next as Bechtel carves up millions of dollars of contracts.
Bechtel was chosen by the US Agency for International Development as the prime contractor to rebuild Iraq after the US-led war in a deal that could be worth up to $680 million over 18 months. The company said it expects to farm out at least 90 per cent of the rebuilding work.
A legion of British companies ranged from listed engineering and construction firm Costain to small, Chester-based scaffolding firm NSF. British companies argue they should be favoured for contracts in Iraq after Britain fought alongside the Americans to topple Saddam Hussein.
UK delegates were joined by firms from across Europe and Asia, and a sizable group of Iraqi exiles hoping to return home and set up in business. One Iraqi man, in his 50s, said he wanted to establish a telecoms operation.
The Iraq Reconstruction Group, which says it numbers some 500 Iraqi professionals, urged Bechtel to work with the people of Iraq. “We don’t want Bechtel to be a centre of hate. Please don’t do it for the Iraqi people but with the Iraqi people,” said group representative Abbas al-Hussaini.
FIERCE COMPETITION: The early part of Friday’s meeting focused on setting out the guidelines for submitting a tender. But companies looking to work with Bechtel on projects may well want to take a careful look before they sign up.
The average contract size will be less than $1 million, and by the end of the week Bechtel expects 10,000 firms to be fighting over them.
“Look around the room — these are your competitors,” said Tom Elkins, the executive in charge of procurement for Bechtel.
Violence and lawlessness, the threat of disease, and uncertainty over Iraq’s future government could make work in the region less attractive than initially expected.
“Your security is your responsibility. It is not provided for you,” Elkins told delegates.
Getting adequate insurance to cover staff could prove a big stumbling block for firms. Insurance premiums for companies looking to do work in Iraq will be high, but subcontractors will most likely have to cover the costs of insuring their workers.
OIL EXPORTS: Iraq is aiming to resume oil exports quickly after the United Nations agreed on Thursday to lift sanctions, a senior Iraqi oil official said on Friday.
Fadhel Othman, number two on the US-appointed advisory panel helping run Iraq’s oil industry, said state oil marketing organization SOMO now would start discussing new export contracts.
“SOMO is doing its best to restart exports as soon as possible,” Othman said.
The timetable for crude sales will depend on SOMO’s ability to communicate with customers from its damaged headquarters in Baghdad.
“How can we sign a contract, fix a price and get a vessel approved when we can barely get through to SOMO?,” said one trader seeking to negotiate a contract.
Under Thursday’s United Nations resolution, US and British occupation forces are offered protection from lawsuits in selling oil until an internationally recognized government is in place.
Long-term oilfield development contracts will be held in abeyance for a permanent government, something US Secretary of State Colin Powell said on Thursday could take a year or two.
SALES FROM STORAGE: Iraq’s first exports since mid-March will come from crude held in storage at Ceyhan, Turkey, the outlet for pipeline deliveries from the northern Kirkuk oilfields.
Potential customers said they expected the first shipment in about a week or two, depending on communications with SOMO.
US trader Bayoil and Jordan’s Millennium already have tankers booked.
Iraq has eight million barrels of crude at Ceyhan ready for sale but it will take more time to resume exports from its dilapidated oilfields.
It is targeting mid-July for exports of 750,000 barrels per day, less than half pre-war sales. Lawlessness in the oilfields, particularly in the south, is hampering restoration efforts.
SOMO’s newly-appointed head, Mohammed al-Jibury, said this week that Baghdad would resume direct contract links with established trading houses and refiners.—Reuters