[A-List] UK sub-imperialism: scraping the Iraqi barrel

[Michael Keaney]

UK firms await Iraq's $5bn verdict

Decision due this week on prime contracts for post-war rebuilding

Terry Macalister
Tuesday March 2, 2004
The Guardian

British firms are due to be told this week whether they have shared in the
first tranche of a $5bn slug of Iraq reconstruction work after intense
lobbying by the UK government.

Papers seen by the Guardian name a dozen firms with either British ownership
or substantial operations here that have submitted bids alongside US
partners. They include BT, Mowlem, Amec and Foster Wheeler alongside smaller
specialist oil services firms such as ECL, Expro and Petrofac.

Seven prime contracts should be awarded this week by an arm of the
provisional government, followed by 10 smaller design-and-build ones in two
weeks' time.

Engaged in the push for the first contracts is PB Power of Newcastle in a
consortium with Parsons of the US. They are trying to win a prime
electricity management contract against two US consortiums.

Another UK firm, Halcrow, is involved in a bid for the key public water
management contract as a sub-consultant to another Parsons joint venture -
this one with the US's CH2M.

Foster Wheeler and ECL are chasing an oil reconstruction contract with
Halcrow also represented in a primary one for transport and communications.
Most of the British companies are in the running for smallerdeals covering
the same sectors. Names include Amec, Mowlem and Black & Veatch.

Meanwhile, papers from the Department of Trade and Industry appear to show
that coalition forces have given in to pressure from contractors to provide
a minimum level of security at construction sites. But British firms have
also been hampered by difficulties getting insurance for staff and are
worried about future sovereignty issues. Confidential documents show the
British government arguing that improving Iraqi security is "top of our
agenda" while admitting that protecting contractors remains a big challenge.

The initial plan was to push this responsibility out to the private sector,
according to the DTI briefing documents. "However, during the tendering
process the programme management office (PMO) has agreed to provide some
basic infrastructure including office and a limited shared pool of close
protection for site visits," the papers say. Firms fear the government might
forbid travel to Iraq on security grounds. "Then firms would be forced into
'force majeure' and have no contractual or insurance cover for their
contracts or goods," the papers add.

Success for British firms is seen as crucial by British ministers. Despite
public statements to the contrary, Labour is acutely sensitive to the
continued failure of domestic firms to win any sizable work in Iraq.
Whitehall is already trying to recruit a civil servant from the Department
of Trade and Industry who could be seconded to the PMO in Baghdad for three
months.

It is claimed in the document that this person would be "well placed to help
UK firms bid for subcontracts resulting from the award of the prime
contracts".

Companies have already expressed concern about what will be the contracting
authority after the planned handover of sovereignty on June 30. The
government believes the transitional authority in Iraq will take over full
responsibility for the contracts but the PMO will still be in charge of
day-to-day running of the deals. It admits however that "tender documents
and contracts are still vague on this point".

It also accepts that contractors' insurance will be "significantly" affected
by the kind of final security arrangements that are agreed and put in place
around construction sites. The total amount of money agreed by the US
Congress for the reconstruction of Iraq totals $18.6bn with some of this
spent already, such as a $2bn contract for Bechtel.