07 August 2003 | David Arminas
Long-term infrastructure projects in Iraq could be delayed for years because of the country's massive debt problem.
Achmed al-Shahrabani, associate principal at management consultancy firm McKinsey & Company's Middle East office in Dubai, said the economic situation was so bad that "the country is bankrupt five times over".
Companies hoping for power, telecommunications and water infrastructure projects from a future Iraqi government could wait up to 10 years, he warned.
A nine-year war with Iran, 12 years of economic sanctions and 30 years of mismanagement by the government has left Iraq with an estimated debt and war reparations bill of $380 billion.
Al-Shahrabani said it could be 2008 before oil production reaches pre-war levels of up to five million barrels a day.
Until the government knows what revenues it has and what its debt repayments will be, it won't know how much it can spend on infrastructure projects, he added.
Tony Allum, chairman of international UK construction firm Halcrow Group and leader of the UK government's industry working group on Iraq, told SM: "We hope the Coalition Provisional Authority will adopt transparent processes and that the Governing Council will use them. Otherwise, companies like Halcrow will not bid for work."
But as one delegate said, the worsening security situation is putting contractors off.
"I wouldn't set up shop there right now," said Laith Hamdani, a sales director with road construction equipment maker Ingersoll-Rand Europe.
"Even before the war, on-site equipment was being stolen and sold to neighbouring countries."