The $20bn Rasheed real estate development in Baghdad hangs in limbo as the Iraqi parliament debates amendments to the national Investment Law.

The project is running behind schedule after it became a test case for proposed legislation allowing foreign businesses to buy Iraqi land for the first time.

The amendments would permit foreign companies to purchase land for pre-approved housing projects. Further proposals would permit foreign investors to trade on the Iraq Stock Exchange and form joint ventures with public and private companies.

Baghdad has selected four foreign companies to begin redeveloping the Rasheed airbase and military camp in southeast Baghdad. Lebanon’s Noor International Holding and Millennium Solutions, and UAE groups Al-Maabar and Bonyan International Investment Group, are waiting for the Iraqi parliament to reconvene after its summer recess and reopen debate on the proposals.

“We are waiting for parliament to make its decision,” says one official at Noor. “This is the first time a foreign company would be allowed ownership [of land] in Iraq. Until we get an answer, we do not know when the project will move forward.”

Potential foreign investors have widely criticised the existing Investment Law for failing to guarantee the security of investments. Iraqis and foreign companies alike have complained that the current legislation is hindering foreign investment into the country. The Iraqi government and the National Investment Commission put the amendments to parliament in early June, with the hope of receiving approval for the changes before the summer holiday.

Sami al-Araji, chairman of the commission, which is responsible for developing Iraq’s investment strategy, says the government will resubmit the proposals to parliament by mid September.

“We hope to get a positive result,” he says. “We hope that parliament understands how important this is. This issue should be about more than politics. We have a responsibility to help rebuild Iraq and we need foreign investment to do this. Housing is one of the most critical sectors.”

The Rasheed development is one of the Iraqi government’s most ambitious post-war reconstruction projects and will take several years to complete.

The current plan includes 64,000 housing units in various designs, spread over a 12.5-square-kilometre site, which should provide housing for 400,000 people.

The development will include mosques, commercial and shopping areas, sports facilities, schools, a hospital and public areas. The Construction & Housing Ministry and Baghdad Mayoralty approved the design in April. 

Noor says the first phase of work at Rasheed will cost about $250m.

“Once an award is made, work could begin in three months,” says the Noor official.

The legislative amendments also form a key part of the National Investment Commission’s proposed $66bn investment strategy.