Baghdad's plans to build a overland trade route will have to wait

05 May 2010

Mega railway and port schemes take a long time to execute

Iraq’s plan to establish a new overland trade route to Europe is ambitious, but it is also long-term.

Assuming the security situation in the country improves, Iraq has to invest to realise its development goals. Years of economic and political instability have led to Iraq lagging in development compared to its neighbours further down the Gulf and in the rest of the region. Its inadequate infrastructure means new ports and railways need to be built.

To do this, the government is spending $60bn on developing its railway network and at least $10bn on developing its ports.

Projects of this scale take a long time to execute. For example, Abu Dhabi spent years planning a new port before it awarded the contract to build Khalifa port at Taweelah in 2007, which will now be completed at the end of 2012. 

Politics will also play a part as Iraq will have to rely on its neighbours, such as Syria and Turkey

The design of Iraq’s Great Faw port is going to take 15 months and construction is not likely to begin until the end of 2011. Rail plans will also take time to execute. Plans to link the six  GCC states by railway are yet to get off the drawing board to actual progress on the ground.

A new trade route is not likely to be operational within the next decade and even after operations start, it will take years for Iraq to establish itself as a viable alternative for shipping firms.

Politics will also play a part as Iraq will have to rely heavily on its neighbours, such as Syria and Turkey to finish their own railway and port projects for a seamless trade route to Europe.

But if Iraq can secure the financing required to fund its plans and can adhere to a timetable to get all of its projects executed, then it will have established a new regional trade route and one that could, in time, become a serious competitior for the Suez Canal.

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