Row looms over reconstruction

21 November 2003
A closed-door meeting which opens in London on 21 November is set to ignite a fresh European row about the management of the reconstruction of Iraq as the US is preparing a new UN resolution backing the accelerated handover of power in Baghdad.

The meeting at an unidentified location has been organised by Trade Partners UK (TPUK), the export promotion arm of the Department of Trade & Industry, to unveil details of $18,600 million of civil reconstruction projects to be awarded by the Coalition Provisional Authority (CPA) in 2004. Leading British and European construction firms are expected to attend, but MEED has learned that companies based in countries that refused to support the coalition have been excluded. No French, German or Russian contractors have been invited and none will attend the meeting.

The apparent embargo on non-coalition countries echoes calls in the US congress, which earlier this month approved a $20,000 million financial package for Iraq, for opponents of the US-led war for Iraq to be excluded from major reconstruction contracts.

The ramifications of the UK failing to invite its closest European partners to participate in one of the most important business meetings of the year drew an uncertain response from TPUK. 'Companies from all coalition countries are able to attend. The event is open to contractors from 46 countries,' spokesman Chris Salter told MEED on 20 November. He failed to specify which countries these were, but the number is identical to the countries deemed by the US to have supported the war for Iraq and subsequent occupation.

Concern persists about the way reconstruction funds, including money raised in the late-October Madrid donors' conference, are being disbursed. So far, not one major reconstruction contract has been awarded to a company from non-coalition nations. US and UK banks and companies, notably Bechtel, Kellogg Brown & Root, General Electric, JP Morgan, Mott MacDonaldand Halcrow, have maintained a virtual monopoly on reconstruction contracts awarded so far.

News of the meeting surprised business people in France and Germany. 'I was not aware of the meeting,' says a senior official at the Federation of German Industries in Berlin. 'The CPA is influenced by hawks and not economists. If non-alliance companies are being excluded from reconstruction in Iraq they are shooting themselves in the foot.'

The conference in London followed a similar event held in Washington on 18 November and is intended to provide a platform for companies planning to bid for Iraqi contracts. The second phase of reconstruction is being financed from aid committed by the US and other countries at the Madrid donors' conference.

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