Valenzano named to head Bechtel Iraq team

25 April 2003
Terry Valenzano, managing director of Saudi Arabian Bechteluntil the start of 2003, has been named as Bechtel's project manager for Iraq reconstruction following the award of the capital contract to the US firm by the US Agency for International Development (USAID) on 17 April. Major subcontracts in the programme were about to be issued as MEED went to press.

Valezano, who was also chairman of the influential Riyadh-based American Business Group, is an experienced Bechtel veteran who has worked throughout the Middle East. Saudi Arabia is the site of the company's greatest Middle East achievements: it was project manager for the Jubail industrial city, which at its peak in the early 1980s was one of the world's biggest development projects. It also managed the construction of King Abdel-Aziz International Airport in Riyadh. Valenzano had moved to London from Riyadh in anticipation of the award of the contract and was in Washington on 23 April ahead of his departure to Iraq.

With the Bechtel contract in place, subcontracts are starting to flow. A spokesman said on 19 April that the company will focus first on the port of Umm Qasr and power plants. The port is a prime entry point for humanitarian aid, and much of Baghdad remains largely without power.

MEED has learned that the US' Cummins Power Generatorshas been nominated to supply 300-400 1.5-2-MW generator sets with combined capacity of 630 MW, in one of several electricity jobs to be let by Bechtel. The original request for proposal (RFP) issued by USAID said up to 500 generator sets would be needed.

Great Lakes Dredge & Dock Companyof Chicago is close to securing the subcontract to undertake the dredging of Umm Qasr seaport. The company is active in the Gulf and won a contract in Bahrain for expanding the Khalifa Bin Salman Port and industrial area on the Hidd in December 2001. That contract calls for $60 million of dredging work.

As part of the plan to open up Iraqi ports, the UN Security Council sanctions committee last week gave approval to award a separate contract for dredging equipment valued at $19.7 million to deepen waterways to Umm Qasr and other Iraqi ports. The equipment includes two dredgers and spare parts to recommission six others. The dredgers will be used to clear silt from the entry channels and main berths to Umm Qasr, Basra and Khor al-Zubair. Heavy silting already places significant limits on the size of vessels that can dock and could seriously hamper attempts to deliver humanitarian aid.

A Bechtel spokesman said that the company is working with USAID on prioritising and detailing the scope of works in the project. 'We will be sending out some work packages that will outline the need for potential subcontractors,' he said.

Bechtel's initial award is worth $34.6 million, but funding up to $680 million can be provided over an 18-month period. The contract calls for repair, rehabilitation or reconstruction of power, water and sewerage networks in different parts of Iraq. There is also provision for the rehabilitation or repair of airports and the dredging, repair and upgrading of Umm Qasr seaport. The contract may also involve responsibility for the repair and reconstruction of hospitals, schools, selected government buildings, major irrigation structures and transport links.

The Bechtel contract is the fifth and by far the largest of eight contracts let in the USAID Iraq relief and rehabilitation programme since the end of January. All prime contracts will be awarded to US companies, but up to half the value of the work could be awarded to non-US firms. USAID has asked for a total of $1,700 million to finance reconstruction work in Iraq in the supplementary budget appropriation approved by Congress on 12 April (MEED 11:4:03).

Nevertheless, the process applied to the award of the contract has been the subject of complaint from some US and non-US corporations that were not invited to bid. The European Commission said on 22 April that it would examine the Bechtel contract to determine whether it conforms to international trade rules. 'Our relevant departments will be looking at this closely,' a spokesman said.

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