Iraq contracts coming to pals

2004-03-07 17:42

Baghdad - The US office managing rebuilding funds in Iraq will start awarding $5bn worth of contracts this week, a senior US official said on Sunday, to firms from countries that supported the war effort.

"We anticipate that the first of those will probably be awarded sometime this week. Most likely is that the first of the contracts are going to be the programme management contracts," the official told reporters in Baghdad.

The US Congress has earmarked $18.4bn for reconstruction in Iraq, almost one third of the 55 billion dollars the World Bank estimates will be necessary to get the war-torn country back on its feet.

The official said the Programme Management Office (PMO) would allocate mostly construction contracts but that it was important to have the management contracts start early.

"That will of course help those contractors be able to start getting in place and getting organised, to give them a little step ahead of the construction contractors," he said.

Much fanfare

The $18.4bn Iraq fund was unveiled with much fanfare by Washington in October but Iraqis say it has had little real impact as unemployment remains high and living standards low.

Two separate deals worth $1bn have already been awarded to the US Army Corps of Engineers to rebuild Iraq's oil sector as part of a $12.4bn US package earmarked for construction.

A further $6bn is being spent on non-construction schemes that are open to bids from all countries regardless of their war views, according to the PMO.

The fund will be managed by the Pentagon at least until June 30, when the US-led coalition is due to transfer sovereignty to an as-yet undetermined Iraqi authority.

- AFP