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[casi] Iraqis lose out on contracts

Iraqis lose out on contracts

By Khaled Yacoub Oweis BASGHDAD

A top US aid official said on Thursday that Iraqi firms will get only half
of the initial reconstruction contracts.

Andrew Natsios, head of the US Agency for International Development (USAID),
said Bechtel, the US company awarded a $680 million contract to rebuild
Iraq's infrastructure, would subcontract half the work to Iraqi firms, a
level significantly lower than Bechtel announced two weeks ago.

"About 50 percent of the subcontracts will go to Iraqi firms with Iraqi
employees," he said.

A senior Bechtel executive said the firm had planned to award 90 percent of
engineering work to Iraqi companies.

USAID awarded Bechtel the contract to rebuild ports, power networks,
airports, schools, roads and other facilities.

Clifford G. Mumm, Bechtel's project director for the reconstruction of Iraq,
had said foreign firms would only be sought for capabilities not found in

But Iraqi contractors who met with Bechtel said they doubted they would win
much business, as nearly 13 years of UN sanctions had damaged their ability
to compete.

Asked about this problem, Natsios said only: "Bechtel will show them the
standards to follow."

Some businessmen have been seeking foreign partners to bid for contracts,
aiming to capitalize on low labor costs in Iraq, where an Iraqi engineer
would only be paid about $200 a month.

"These foreign companies never used to pick up their phones when I called,"
Ghassan Kubba, vice-chairman of an Iraqi holding company. "Now they are
running after me."

"Bechtel is the only game in town," said computer company owner Muhammad Al

Meanwhile, unemployment in Iraq is now well over 60 percent.


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