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Last Updated: Monday, 26 January, 2004, 11:17 GMT
Iraq might open up power markets
A Bechtel engineer overseeing repairs to a Baghdad power plant
Iraq is still short of electricity
Foreign firms may be invited to build power stations in Iraq, interim energy minister Ayham al-Samarie has said.

The move is being considered to help solve power shortages which are hampering Iraq's reconstruction.

Mr Samarie said Iraq plans to spend $6.4bn over the next two years on 201 projects to repair power plants and build new ones.

His ministry has also signed deals to buy power from neighbouring countries under a plan to double supplies.

Raising the pace

Mr Samarie said contracts to build new power plants would be open to both Iraqi and foreign contractors under ownership schemes that have proved popular with other developing countries.

"It's an idea to speed things up...all countries that lack liquidity have tried it," Mr Samarie told a news conference on Sunday.

Iraq would offer build-operate-transfer deals (BOT), under which firms could build power stations and run them for an agreed number of years - probably five to 10 - before transferring ownership to the Iraqi government, he said.

Iraq might also offer contracts allowing the builders to retain ownership of the power plants, he said.

In both cases, the Iraqi authorities would set an agreed price to buy the electricity.

Imported supply

Mr Samarie said contracts with neighbouring countries should contribute to the goal of increasing power supplies from about 3,000 megawatts a month at present to 7,000 MW by mid-2004, the Dow Jones news wire reported.

Iraq has signed power supply deals with Syria, Turkey, Jordan, Iran and Kuwait.

Iraq's current power production is still below pre-war levels of 4,400 MW per month, according to the US Agency for International Development (USAID).

USAID is involved in administering the allocation of power contracts in Iraq.

Two US firms, Bechtel and Parsons, won a deal to rebuild Iraq's infrastructure, including power facilities, worth a total of $1.8bn in January 2004.

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