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Last Updated: Thursday, 11 March, 2004, 13:27 GMT
US firms win more Iraq contracts
Basra oil refinery in Shuaiba, southern Iraq
The contracts cover key sectors of the Iraqi economy
The US Defense Department has awarded seven Iraq reconstruction contracts worth a total of about $130m (72.3m) to consortia of US firms.

The contracts cover management projects in six sectors ranging from oil to electricity and are part of a package worth $5bn.

Payment will come out of the $18.6bn in funds for Iraq set aside by the US.

Companies from nations that opposed the war in Iraq were not allowed to bid for these contracts.

Gains for UK

The BBC's Justin Webb says that a smaller tranche of contracts to be awarded soon might be handled differently.

RECONSTRUCTION CONTRACTS
AECOM: $21.6m
Iraq Power Alliance Joint Venture: $43.4m
Foster Wheeler: $8.4m
CH2M Hill/Parsons: $28.5m
Berger/URS: Three contracts worth $27.7m in total
No British firms won in the latest round, but the UK government pointed out that some work will be handled by the UK offices of the victorious US bidders.

"These contract awards will bring jobs and economic benefits to the UK economy," the Department of Trade & Industry said.

In a brief statement, the DTI said US engineer Foster Wheeler has "offices in Reading from where they already do a lot of business in the Middle East".

Another contract involves PB Power, a subsidiary of Parsons Brinckerhoff - the US firm that built the first New York subway.

"PB Power will do this [Iraq] work from their base in Newcastle," the DTI said.

UK civil engineering firm Halcrow told BBC News Online it has won work on restoring Iraq's water supplies as part of the $28.5m deal landed by CH2M Hill and Parsons.

"We're subcontracted by them," said Halcrow spokesman Garry Whittaker. The contract covers "drinking water, water supply and irrigation".

Future hopes

US firms have been by far the biggest winners of Iraq reconstruction deals, leading to complaints from European politicians and disappointment among contractors.

The BCCB lobby group, which represents UK's overseas engineering and financial consultancy industries, said it was "not surprised that US firms predominate" and pleased that British firms' expertise had been recognised.

"Although we're delighted to see UK firms benefiting from US contracts it is not the only game in town," added BCCB chief executive Colin Adams.

In his view, there is also "tremendous potential" in future World Bank projects to restore Iraq's institutions. The World Bank held a meeting with executives from 70 British firms four days ago to outline its plans, he said.

"At this stage, the reconstruction process is almost entirely financed from US grants so it's not surprising to see a lot of US companies involved," said David Butter, Middle East business editor at the Economist Intelligence Unit.

"Later down the line when there's more multi-lateral financing available, you might see a wider spread of companies involved."

Frustrated

Our correspondent says the Iraq contract process has been fraught with difficulties.

The awarding of some large projects, including the re-equipping of Iraq's security forces, has been delayed because of complaints about the fairness of the tendering system.

Peter Mason, chief executive of UK engineering firm AMEC, said on Thursday that his firm would be "yet more frustrated if we don't secure anything" in Iraq in the next contract round.

AMEC won contracts to clear up the destruction in New York after 11 September.

As part of the $5bn worth of contracts now being awarded, another 10 contracts are expected to be awarded in the coming weeks.

"Everything is moving very nicely and on schedule and the awards should be made soon," said retired Admiral David Nash whose Program Management Office at the Pentagon reports to the CPA.

A DTI spokesman said he could not disclose if any UK firms were hoping to win business in the next round.

Contracts for reconstruction in Iraq have been awarded by a number of bodies, also including the US Agency for International Development (USAID) and Iraqi ministries.




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