Iraq: a brave move for contractors

Corruption and fraud are two factors affecting chances of a successful reconstruction programme.

COMMENT, Human Resource

About a year ago, Construction Week explored the findings of a report by the Special Inspector General for Iraq Reconstruction (SIGIR) into the failures of the US-led rebuild effort in the country.

Corruption, fraud, lack of management control and security - as well as specific cases of structural integrity issues - were all rolled out as factors affecting the chances of a successful programme.

So on reading the latest SIGIR report (they are published quarterly) it may be reasonable to expect that the situation has improved in some way. Apparently not.

An ongoing lack of security and control over subcontractors has led to contractors suffering delays and, in some cases, not completing projects and walking away. And the endemic corruption in the country is described in the report as the 'second insurgency'.

US construction giant Bechtel left Iraq in 2006. While just under half of its contracts met original objectives, the remainder faced cancellation or were passed on to other companies to finish.

The use of multiple subcontractors made oversight complex and security issues prevented it from finishing a water treatment plant in Sadr City and a children's hospital in Basra, among others.

The Bechtel audit was described by Stuart Bowen, special inspector general for Iraq as "emblematic of the many challenges faced by contractors in the Iraq reconstruction programme".

Insufficient oversight, descoping, project cancellations, cost overruns and significant delays remain at the forefront of contractors' minds as they grapple with working in a politically and economically unstable market.

But despite such a wide catalogue of issues faced by incoming firms, it was with great optimism that calls for international investment into Iraq were made at a conference last month in Dubai.

Speakers were quick to highlight the plethora of financial opportunities available to contractors and developers considering a move into the war-torn country - construction in Iraq is potentially a US $100 billion market, making it one of the largest in the region.

But it was also pointed out that 'security' would be the responsibility of individual companies.

With a continuing lack of stability in both the political and economic arenas, it would be a brave contractor who judges the risk of working in Iraq as 'worth it'.

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