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despite controversy over the dominant role american firms will play in rebuilding war-torn iraq, local analysts are optimistic that egypt’s construction and building-materials sectors are in the running for subcontracts. while it’s no secret that the eight prime reconstruction contracts will be awarded to major us firms, a fair chunk of the $1.7 billion the united states has allocated to rebuilding iraq is slated to go to foreign subcontractors. as of press time, the first five of the eight long-term contracts – for capital construction, seaport administration, education, local governance and personnel support – had been given to us firms. the contracts, for airport administration, logistical support and public health, however, were still pending. several egyptian companies in construction and construction-related fields, meanwhile, are hoping for a share of the post-war bounty, by way of subcontracts. “it would be hard to mobilize all of the companies, equipment, materials and labor from the united states,” noted karim nehma, a financial analyst at sigma capital. us firms, he added, “will likely subcontract to cheaper companies in the region.” of most interest to egyptian companies is the much sought after capital construction portfolio – awarded on april 17 to san francisco-based construction giant bechtel. under the $680 million deal, 3,000 schools, 120 hospitals and 2,780 miles of road are to be rebuilt and modernized within 18 months. the most talked-about local contender for iraq reconstruction subcontracts is cairo-based orascom construction industries (oci) and its subsidiaries. oci investor relations director hassan badrawi said in april that the local construction giant is already pre-qualified for us government contracts, and has won tenders for usaid-financed projects in the past. he wouldn’t, however, speculate on the exact details of oci’s involvement in iraqi reconstruction. “we hope that the egyptian construction sector as a whole can contribute in some way or another,” badrawi said. according to oci chairman nassef sawiris, quoted in business daily al alam al youm on april 14, oci has close ties to fluor, a california-based construction company that is reportedly high on the pentagon’s list of companies being considered to run iraq’s oil industry. us-based oci subsidiary contrack international is another a key contender for iraqi subcontracts. contrack’s vice president in egypt, osama bishai, said the company – which has also undertaken many us government-financed projects in the region previously – would be eager to take part in rebuilding iraq, but that it was still to early to tell which way contracts would go. “we are not aware at this stage of what the us government’s intentions are,” he said. “it will not be clear until the dust settles and the politics become clearer.” contrack was recently one of 13 firms asked to bid on a one-year, $100 million us army contract for construction work in the middle east, including iraq. but some local construction analysts are pessimistic as to the chances egyptian firms realistically have – given that even powerful european contenders appear unable to prevail against american competition. “i’m sure egyptian companies will be excluded,” suggested one construction analyst at a cairo brokerage firm. “i don’t think they were expecting to be included in the first place.” managing director of the local dar al-handasah engineering consultancy yehia zaki, however, was more optimistic. he said that egyptian cement and steel companies were offering competitive pricing, and that they have an additional edge due to egypt’s proximity to – and friendly relationship with – its arab neighbor. cairo’s certainly no stranger to iraq: along with france and russia, egypt was among iraq’s top three trading partners under the oil-for-food program. zaki, who also chairs the construction committee of the american chamber of commerce in egypt (which publishes business monthly magazine), added that egypt’s low-cost laborers and skilled engineers were strong assets in the race for contracts. “i think there is potential for egypt. egypt can offer a lot to the reconstruction process,” he said. zaki added that dar al-handasah – which has london and us offices – is also vying for engineering consultancy subcontracts. “this is one domain where we have the expertise and where we could render assistance in a lot of ways,” he said. with iraq’s massive oil fields in poor shape after a 12-year sanction regime, a leading priority will be to rebuild oil infrastructure. iraq has the second largest oil reserves in the world, and oil revenues could finance subsequent reconstruction, according to analysts. but some local petroleum officials were as pessimistic as their counterparts in the construction sector vis-à-vis subcontract winning. “even britain has been complaining about not securing contracts,” said saiid el derini, chairman of tam oilfields services, which provides technical services and equipment to oil companies. “we are not going to have a piece of the cake,” he predicted. michael barron, policy and corporate affairs manager at british gas egypt, however, said egypt’s high level of petroleum expertise could give it an advantage. “egyptian companies and engineers have a lot of experience dealing with foreign companies,” he said. but while the sector “definitely has the capability” to assist in reconstruction, one senior egyptian government official said political considerations would have to be ironed out first. for now, though, the wrangling continues, with unilateralist us plans for iraqi reconstruction being roundly condemned by france, germany and russia – countries which insist the united nations must lead reconstruction efforts. for the time being, therefore, the fate of lucrative subcontracts will be ruled not so much by competitive bids and tenders as by notions of power and realpolitik.
daliah merzaban |
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