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The Contract calls for the repair, rehabilitation or reconstruction of vital elements of Iraq’s infrastructure. This includes assessment and repair of power generation facilities, electrical grids, municipal water systems and sewage systems. The Contract also requires repair or rehabilitation of airport facilities and the dredging, repair and upgrading of the Umm Qasr seaport in cooperation with other USAID contractors working in those sectors. The Contract involves assessment and repair/reconstruction of hospitals, schools, selected ministry buildings and major irrigation structures as well as restoration of essential transport links. It is anticipated that Bechtel will work through subcontractors on these tasks upon identifying specific needs.
It is expected that most of the prime Bechtel contracts will be parceled out to subcontractors, who will be held to the same quality and criteria as Bechtel. Tender documents for the various tasks to be subcontracted by Bechtel will be offered to qualified/registered firms. Qualification is based upon experience, financial capability, current capacity and other objective criteria. Prospective suppliers and subcontractors are required to register through Bechtel’s Supplier Portal (procweb@bechtel.com) Bidders will be evaluated based on information provided by them as well as from third party sources. Evaluation criteria will also be set forth in the tender documents. Bechtel may award the subcontract “without discussions”. In this regard bidders are advised to submit their best offer in their first offer since there may be no further discussions or negotiations with respect to the price. If however additional information is deemed necessary, Bechtel may shortlist the bidders and invite the selected participants for further discussions. Subcontractors should take the following into consideration while submitting their offers:
The other aspects to be considered by subcontractors are: Security: Iraq is described as a safe place to work but not secure. Each subcontractor is expected to be responsible for providing its own security for its personnel and property. Self-sufficiency: Basic and daily needs such as housing, food, medical supplies, and such other items of daily use and transportation services are not readily available in Iraq at present. Until Iraqi ports are fully operational and the airports are open for commercial traffic, most of the food and other essential items will be in short supply. Each subcontractor will be responsible for providing adequate supply of such items and services to its personnel.
Prospective subcontractors may register with Bechtel. Such registration requires procurement of a D-U-N-S (Data Universal Numbering System) number through Dun & Bradstreet. The D&B web site addresses are as given below: The D&B home page for general information: U.S. company registration with D&B: International company registration with D&B: The DUNS number helps identification of each business in Bechtel’s systems. It assists in confirming the existence of the business and determining the capacity of a supplier or contractor to perform a specific scope of work. Bechtel web site addresses are: http://www.bechtel.com/
The Kuwait Chamber of Commerce & Industry is keen to play an active role in the reconstruction of Iraq and the restoration of trade and commerce between the State of Kuwait and Iraq. In its annual general assembly meeting, the Kuwait Chamber of Commerce & Industry urged the Kuwaiti government to take positive steps in its efforts towards rebuilding bilateral ties between the two countries. The Chamber contacted the President of the Iraq Commercial Chambers Union and invited him for discussions involving trade and commerce as well as improving the performance of the ports and other necessary facilities in the region. The Chamber also called for establishing a free zone in Kuwait along the borders with Iraq, as a preliminary step towards renewing trade relations. The Chamber plans to facilitate establishment of stores, warehouses and exhibitions in the free zone through the involvement of the private sector. This also coincides with the development of Failaka Island and the exploitation of the same for purposes of tourism and trading. This island is isolated by water and is located in between three countries, Kuwait, Iraq and Iran. The commercial and tourist development plans of the island envisage several job opportunities in the region and its inhabitation by citizens of all three countries. In a recent development, the Deputy Chairman of the Chamber, Mr. Ali Thunayan Al-Ghanim announced that the Chamber had arranged for over 5,000 visas for Kuwaiti businessmen to visit Iraq and about 150 business visas were issued to Iraqi businessmen who wish to visit Kuwait for exploring business opportunities. Mr. Al-Ghanim expressed the view that several Kuwaiti companies were keen on working in Iraq, however, such a situation would take some time to materialize until there is stability in the region. He also advised Kuwaiti businessmen to enter the Iraq market directly with Iraqi merchants rather than use any middlemen. Historically Iraqi merchants have had commercial ties with their Kuwaiti counterparts. Further, many countries keen on establishing ties with Iraq and playing a role in the reconstruction process view Kuwait as the main gateway for their operations in Iraq due to reasons of proximity and easy access to essential goods and services. Although the Kuwaiti government has yet to take positive steps towards the restoration of economic, political and social ties with Iraq and the new government, the private sector as well as the public sector in Kuwait and the entire business community at large is in favour of such restoration and eagerly awaiting strategic policy changes to be issued by the government.
The Iraqi Business Council (IBC) has been formed in the U.A.E to provide information with regard to investments in the Iraqi market. The IBC will provide a list of tenders for projects in Iraq, news of joint ventures and projects that would benefit business entities in the U.A.E. The IBC expects that hospitality and tourism industry, agriculture, healthcare, telecom, IT and construction are among the areas expected to attract huge investment.
In June, 2003, SOMO, the State oil marketing company in Iraq awarded the first post-war crude oil tender to six different companies for 10 million barrels of oil held in storage. The companies are, Spanish Refiners Repsol and Cepsa, Turkish Tupras, Italian ENI, French Total and Chevron Texaco of the United States. Of the 10 million barrels, 5.5 million will go to the European market and four million to the US, the remainder being left for “tolerance”, as per Mohammed Al-Jibouri, the Director General of SOMO. Out of the 10 million barrels tendered by SOMO, Basrah Light comprised two million barrels and Kirkuk eight million barrels. A total of 52 companies had bid for the tender, and out of that, three companies did not qualify. SOMO gave preference to refiners over trading companies during the course of awarding the tender. SOMO expects exports to resume in the near future.
Provisional Coalition Authority -Tenders The Arab Business Guide has recently reported that the Provisional Coalition Authority (CPA) in charge of Iraq, has begun announcing tenders for infrastructure projects. Iraq’s infrastructure had suffered considerably due to sanctions and its repeated involvement in military conflicts. These projects are expected to upgrade the overall infrastructure existing in Iraq. The CPA has recently sought an expression of interest from parties for the allotment of three telecom licenses. It is also expected that considerable resources will be used to introduce information technology products and services especially in the banking sector.
Banking The new banking law of
Iraq, Order No. 40, issued by the Coalition Provisional Authority
Administrator has recently come into force. The law permits 6
foreign banks to conduct banking activities in Iraq. Foreign Banks
interested in obtaining a license must file their applications and
supporting documentation with the Central Bank of Iraq. Once a
license is issued, registration procedures are required to be
carried out at the Ministry of Trade prior to commencing
operations. In
another significant step towards opening Iraq to international
markets, the Central Bank of Iraq has authorized international
banking transactions including making and receiving funds from
abroad and dealing with Letters of Credit. As an interim measure, the Trade Bank of Iraq has been established by a consortium led by J.B. Morgan Chase and involving the National Bank of Kuwait, Australian and New Zealand Banking Group, Standard Chartered Bank, Bank of Tokyo - Mitsubishi, Royal Bank of Canada, Credit Lyonnais etc. This Bank will aid international banking transactions until such time as a viable alternative is in place.
Foreign Investment Order No. 39 dealing with foreign investment has recently been promulgated by the Coalition Provisional Authority. This law permits foreign entities to directly do business in Iraq. Foreign entities may establish a wholly owned subsidiary in Iraq, establish a branch office, enter into joint ventures with Iraqi entities, participate in investment activities, manage and transfer its rights and obligations to other entities. The foreign entity may also repatriate its profits, income or capital. There are limitations when dealing with real estate. A foreign entity may take a property on lease or license for a maximum period of 40 years. Further, foreign direct and indirect investment cannot be undertaken to exploit the natural resources sector.
International Litigation The Coalition Provisional Authority has recently passed an order (Order No 32) transferring all pending international litigation and arbitration matters relating to the Government of Iraq to the Ministry of Justice.
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