Is Baghdad still too dangerous?

An Iraqi labourer works at a construction site in central Baghdad: regional firms are divided on the risk of sending staff to the country.

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A general election, which at first, was too close to call, marred by a series of bomb attacks and recently disputed by the current leader of the country, will have only increased the ubiquitous nerves surrounding Iraq and its capital.

As the Justice and Accountability Commission continues to root out former members of Saddam Hussein’s Baath Party, who might have won seats as current candidates, fears mount in Baghdad of prolonged instability.

Developers in the Middle East who may have taken a cursory glance at some of the many infrastructure and residential-related opportunities that will reinvent the city will be keeping their cards close to their chest.

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Project plans are still coming – including a planned one million new houses - though the issue of security remains the bottom line for both contractors and suppliers.

Mr Govia of Emirates Buildmat is one example of those giving the city a wide berth. “The situation in Baghdad is tense, and we’re waiting for it to be resolved,” he said. “Law and order and safety are very important – [to know that] when you go over there your investment is protected. People are hoping for security.”

Mr Govia said he believed that the majority of the one million homes would be built in Kurdistan, in the north of the country.

Dinesh Nainani is another who believes that the risks – and the costs associated with security and potential losses – are just too high. As the general manager of Shaker Trading, a mid-sized supplier of steel products such as pipes, sheets and tubes, he said: “We have seen more orders from the country in the last year, year-and-a-half, but we would not send men there.”

This view is not the consensus, however, and some companies are reviewing the risk-reward factor and coming down on the side of the former.

Khaled Saqqaf, head of the six-year-old Iraq office for law firm Al-Tamimi, said the firm has seen more companies looking to enter Baghdad in the last two years requiring the firm’s advisory service.

“I think there are lots of opportunities. The important thing to know about construction in the country is the business classifications; that is, what type of work you are allowed to carry out. So the first class would be that a company can operate on any project, the second class only on a few projects, and so on.”

He adds that if a foreign company has the project already signed before they enter the country, it is a far more streamlined process.

“Companies are asking us about security issues and taxation among other things.”