Baghdad is considering two rival multi-billion-dollar designs for a deep-sea port on the Gulf coast that will shape the future of Iraq's maritime industry.

Located only a few kilometres apart on the Al-Faw peninsula, the two proposals for the new Basra Grand Port are under consideration by a committee within the Transport Ministry.

"They are very different proposals," says one senior transport official in Baghdad. "The committee has not settled on either one."

However, the ministry is understood to be favouring the cheaper of the two schemes, a conversion of the existing port at Al-Faw.

Transport Minister Amer Abduljabbar told MEED at a London conference on 30 April that Al-Faw is moving "to the next stage" following the commissioning of a detailed feasibility study.

Italian consultant Consorzio Italiano Infrastrutture e Trasporti per l'Iraq (CIITI) has drawn up the Al-Faw feasibility study, under which 15 new commercial berths will be developed at the port over two years. This first phase would cost e2.8bn ($3.7bn), with subsequent phases allowing expansion.

More ambitious is the $12bn rival proposal for an entirely new port at Ras al-Bisha put forward by Sheikh Josef Hanna, an Iraqi entrepreneur based in Abu Dhabi, and his team, which includes UK consultant Halcrow.

"At the moment, the government seems to be leaning towards the smaller port, but we are waiting," says Hanna. "We do not think the Al-Faw project serves the needs of Iraq. It is too small."

The Sheikh's team claims that Al-Faw's location leaves it prone to heavy build-up of silt, which hampers operations at Iraq's current deep sea port at Umm Qasr by requiring constant dredging.

The team argues that Al-Faw's design caters only for containers and general cargo, and lacks industrial facilities. "Why build a new port that has the same problems as the old one?" says one member of the team.

"Ras al-Bisha costs much more, but it would be much bigger and the design extends into deep water that does not have the same problem with silt. It would not require so much dredging to maintain the channel."

Abduljabbar says that Ras al-Bisha remains in contention, and Hanna says he has the $12bn financing in place.

Hanna's plan provides for a wider development including a free zone, industrial park and export facilities for oil and gas.

Behind the port, the design envisages a new city with housing for 500,000 people.

The new port will eventually supercede Iraq's existing port at Umm Qasr, which is itself undergoing redevelopment.

Abduljabbar halted plans for a $1bn sale of Umm Qasr's southern port when he took office in August 2008. Instead, he is selling individual leases at the port.

In February, the State Company for Iraqi Ports issued tenders inviting foreign shipping groups to run three berths at the site.

With the new port still years away, Umm Qasr remains Iraq's only deep sea marine outlet. Redevelopment work at the site has accelerated and revenues have surged since the port was reclaimed from Sadrist militants last year (MEED 25:4:08).

"We are still working to improve facilities at Umm Qasr alongside planning the new port," says Abduljabbar. "Umm Qasr is still vital to the Iraqi economy."

However, the government has been nervous about appearing to pass major national assets to foreign control.

In December last year, MEED reported that the US' Cornell Group had been selected to oversee the work at Umm Qasr, but the company's contract remains unsigned amid talk that some transport officials in Baghdad are resisting the appointment.

CIITI was unavailable for comment.