Baghdad accelerates Umm Qasr deep sea port privatisation

30 May 2008
Baghdad has issued a request for proposals from international consultants to oversee the privatisation of Iraq’s main deep sea port at Umm Qasr.

Sources involved in the privatisation of the southern port estimate the value of the deal could increase to almost $1bn from an initial estimate of $500m, depending on the offers made and the rising cost of raw materials.

The deadline for requests is 15 June. Baghdad will appoint a consultant in the summer to lead the next stage of the process, to seek contractors and operators to build a container terminal at the site, and take up a 25-year concession to manage the port.

Container capacity at Umm Qasr’s southern port is scheduled to be 300,000 20-foot-equivalent-units (TEUs) initially, rising to 1 million TEUs in the future. “The government of Iraq recognises its lack of knowledge and expertise in a project of this size and on such a long-term contract,” says one adviser to the government.

The privatisation plan is being accelerated following a security operation in April to seize control of the neighbouring northern port at Umm Qasr, which had been taken over by Shia insurgents.

Operations at the port had been infiltrated by the Jaysh al-Mahdi militia, which had been siphoning off revenues from the port to finance its activities.

The instability had deterred potential investors in the main port until the Iraqi army took back control.

The area remains secured by a large number of government troops (MEED 25:4:08).

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