Thread: Archive Latest News - Think Tank - 01/01/08 - 14/04/08

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Investing Iraq's oil wealth

Increased Iraqi oil revenues stemming from high prices and improved security are piling up in the Federal Reserve Bank of New York rather than being spent on needed reconstruction projects, a Washington Times study of Iraq's spending and revenue figures has shown. U.S. officials and outside analysts blame the collapse of the country's political and physical infrastructure for Baghdad's failure to spend the money on projects considered vital to restoring stability in the country.

Out of $10 billion budgeted for capital projects in 2007, only 4.4 percent had been spent by August, according to official Iraqi figures reported this month by the U.S. Government Accountability Office. The report cited unofficial figures saying about 24 percent had been spent.

Meanwhile, some $6 billion to $7 billion from last year's budget is "being rolled over" and invested in U.S. treasuries, said Yahia Said, director of Iraq Revenue Watch, part of the private watchdog group Revenue Watch Institute.

"The government is broken," said Mr. Said, speaking by telephone from Baghdad. "The country's midlevel bureaucracy has either fled the country or been purged in de-Ba'athification, [and] a lot of ministers are politically appointed and not professional."

The result is that orders go out from the ministers in Baghdad, but there is no structure or staff at the middle level to carry out the instructions. "It's like they lost the manual for driving the government," said Mr. Said, who is working to put that blueprint back together.

U.S. and foreign officials told the GAO that weaknesses in Iraqi procurement, budgeting and accounting procedures had stymied the completion of projects.

"For example, according to the State Department, Iraq's Contracting Committee requires about a dozen signatures to approve projects exceeding $10 million, which slows the process," the GAO wrote.

Well, it is nice to see they are investing in the US.

The reason why a dozen signatures may be required for large projects is obviously concern about corruption. With Iraq's history, that concern is understandable. Another reason why money has not been spent is that some areas were still under attack and contractors would be targeted and the infrastructure they built would be targeted once completed. The government is doing a better job of putting the money into the hands of the locals for projects that have a direct effect on the lives of the locals. Iraq still needs to invest in its military including building a logistic capacity that will permit its troops to operate without the help of the US.

Investing Iraq's oil wealth | Iraq Updates

ISX index higher by 0.235%

The Iraqi Stock Exchange (ISX) index increased by 0.235% on Sunday compared to the previous session, closing at 34.100 points.

Traded shares in Sunday's session exceeded 658 million at a total value of over $903.703 million by implementing 247 contracts.

Non-Iraqi investors participated with 58 million shares, totaling more than 120 million Iraqi dinars by implementing 12 contracts in the banking sector.

According to the daily analysis of the capital market, the banking sector's index, in which 13 companies traded, closed at 36.370 points, while the industrial index, in which five companies traded, ended at 11.120 points.
The statement concluded that 26 companies were traded in Sunday's session out of 94 companies registered in Iraq's stock exchange, of which nine indexes went up, 12 dropped, and five maintained their previous price.

ISX index higher by 0.235% | Iraq Updates

Negative aspects to Basra reconstruction projects- source

Negative aspects can be found in reconstruction projects implemented in the southern Iraqi province of Basra, a local official source said on Sunday, citing the lack of correspondence between the projects on the ground and accredited technical standards.

"Several violations have been detected in the projects currently in development in Basra," Engineer Abdul Zahra Samir Abbas, a member of the reconstruction committee in Basra, told Aswat al-Iraq, Voices of Iraq, (VOI).

"The operating companies and contractors used materials that do not meet the technical standards that have been agreed upon," Abbas explained.

Appropriate reconstruction levels were not observed in sewage projects and the establishment of schools in the province, he added.

"Violating companies have been prevented from proceeding with their projects and reconstruction units were instructed to take all necessary actions against them," Abbas noted.

In cooperation with local unites, the reconstruction committee has managed to overcome many obstacles and follow up on work, Abbas said.
The Shiite province of Basra lies 590 km south of the Iraqi capital Baghdad.

Negative aspects to Basra reconstruction projects- source | Iraq Updates

Lack of experience behind low reconstruction performance- minister

The low number of projects conducted in Iraqi provinces as part of reconstruction efforts is linked to the lack of experience in planning and implementation, the Iraqi minister of planning and development cooperation said on Sunday.

"We admit the existence of deficiencies and that is why we assert that we need support. We have established planning units all over the country to provide technical support to municipal councils and enable them to implement their projects," Minister Ali Baban told Aswat al-Iraq, Voices of Iraq, (VOI).

"The low percentage of projects implemented thus far is linked to Iraqi provinces' lack of experience in planning and accomplishment," the minister explained.

A ministerial statement last week ranked Karbala first among Iraqi provinces in the accomplishment of development projects.
Karbala, Iraq's second holiest Shiite city after Najaf, lies 130 km southwest of the Iraqi capital Baghdad.

Lack of experience behind low reconstruction performance- minister | Iraq Updates

President Talabani returns to Baghdad

The Iraqi President, his Excellency Jalal Talabani returned to Baghdad today after a several days in Kirkuk.

During his visit, he met with tribal clans, representatives from all factions in the city and members Kirkuk’s Provincial Council.

President Talabani discussed the implementation of Article 140 and the general conditions in Iraq.

The Iraqi President met with the US Consul and Commander of the MNF in the city, and discussed the general situation in the city, as well as ways of resolving issues and improving public services.

President Talabani on the last day of his visit, met with a broad delegation including members of Kirkuk Provincial Council, and the Governor of Kirkuk.

PUKmedia :: English - President Talabani returns to Baghdad

South Sulaimaniyah Power Substation Opens

A new U.S.-funded substation will help improve the distribution of electricity in the southern neighborhoods of Sulaimaniyah city and surrounding villages.

Built at a cost of $28 million, the 132 kV South Sulaimaniyah substation was officially inaugurated today by Kurdistan Regional Government (KRG) Deputy Prime Minister Omar Fattah, KRG Minister of Electricity Abdul Rahman Siwaily, Sulaimaniyah Governor Dana Majid, U.S. Regional Coordinator Jess Baily, and Charles Riley of the U.S. Army Corps of Engineers.

The KRG Ministry of Electricity has taken control of the facility as the U.S. Army Corps of Engineers completes final reviews and trains local staff. In his remarks, Jess Baily described the power station as “a significant step to a reliable power supply for homes and businesses.”

The substation, and others that have been constructed with Iraq Relief and Reconstruction Funds (IRRF), help to link the region to the national electricity grid. The Iraq Relief and Reconstruction Fund was established by the U.S. Congress to rebuild Iraq's infrastructure, damaged from years of neglect, sanctions, and war. The Sulaimaniyah Resident Office of the Army Corps of Engineers has completed 93 projects worth over $100 million and has another fifteen projects worth over $70 million underway or in the planning stages.

In congratulating the U.S. Army Corps of Engineers on it accomplishments, he noted that the U.S. was refocusing its assistance from construction projects to building the capacity of governments at all levels to meet the needs of citizens. In particular the U.S. was helping the KRG Ministry of Electricity develop a master plan to deal with rising demands for electricity. Baily also congratulated the KRG for its actions “overcoming years of underinvestment in power generation by attracting private investment to build two new power plants here in Sulaimaniyah and Erbil.” Remembering the victims and suffering of Anfal campaign, he said Americans admire the changes that have taken place since 1991 and are proud to “be with you today as you build a better future for this region and the rest of Iraq.”

PUKmedia :: English - South Sulaimaniyah Power Substation Opens

Basra ports re-receive ships after weather amelioration

Navigation resumed at Basra ports after the recent improvement in weather conditions, public relations and media director at the State Company for Iraqi Ports said on Sunday.

"On Sunday, Umm al-Qasr Port received three ships: Mardas for passengers, al-Nasir for containers and Mona for transporting rice," Abdul Kareem Sabri told Aswat al-Iraq, Voices of Iraq, (VOI).

Khour al-Zubair Port received Sana Ship which carried 1,000 tons of iron, while three other ships at the port of Abu Falous, the director added.

"Navigation activities are not bound to a specific schedule, but are related to the readiness of the ships," Sabri explained.

The Shiite province of Basra, 590 km south of the Iraqi capital Baghdad, has five commercial ports and two oil ports: al-Maaqal, established in 1916 by the British forces and handed over to Iraqi authorities in 1937; and Faw, a small port on the al-Faw Peninsula near the Shatt al-Arab and the Persian Gulf.

Iraq's seacoast stretches for more than 20 km.

Aswat Aliraq

New design for Baghdad by international company

Baghdad mayorship has contracted an international company to develop a new design for the Iraqi capital in one and a half years.

The capital's mayorship signed a $3.737 million contract with an international company to create a new contract for the city with a deadline of 17 months, according to a statement released by the mayorship and received by Aswat al-Iraq, Voices of Iraq, (VOI).

The statement did not name the company, but indicated that a committee consisting of Iraqi university professors and designers were assigned to follow up on all procedures.

Aswat Aliraq

4 years for Baghdad to receive full power- U.S. commander

Supplying the Iraqi capital with full power will take no less than four years, which is needed to build new power stations after old ones were damaged in the wake of the 2003 U.S.-led invasion of the country, the national daily The Australian said in a report on Monday.

Quoting US military commander Brigadier General Jeffrey Dorko of the U.S. Gulf Regional Division, which is involved in reconstruction projects, the newspaper wrote, "demand for electricity was likely to outstrip supply for several years because many Iraqi power stations had been damaged or destroyed and commissioning new ones would take anything up to four years."

"Brig-Gen Dorko said 76 new health clinics - 21 of them in Baghdad - had been built while 1885 new schools had been constructed countrywide and another 1604 repaired," read the report.

Meanwhile, a civilian spokesman for the Baghdad security plan, Tahseen Sheikhly, said that Baghdad is drowning in sewage and suffering from a shortage of water and electricity.

"One of three sewage treatment plants is out of commission, one is working at stuttering capacity while a pipe blockage in the third means sewage is forming a foul lake so large it can be seen 'as a big black spot on Google Earth,'" the report said quoting Sheikhly.

"Mr Sheikhly said water pipes, where they exist, are so old it is not possible to pump water at a sufficient rate to meet demands - leaving many neighborhoods parched."

"A sharp deficit of 3000 megawatts of electricity adds to the woes of residents, who have to rely on neighborhood generators to light up their lives and heat their homes," according to the report.

"Many of these problems date back to the Saddam Hussein regime when not enough attention was paid to basic infrastructure, he said, and insurgency, sectarian violence and vandalism since the US-led invasion in March 2003 had further ravaged services in the capital," the report indicated.

"More positively, he said, the extensive Baghdad security plan, known as Operation Fardh al-Qanoon (Imposing Law) and launched on February 14 last year, was allowing services to be gradually restored."

Aswat Aliraq

Demand for the dollar soars in daily auction

Demand for the dollar increased dramatically in the Iraqi Central Bank's auction on Monday, the second session this week, registering at $162.515 million compared to $74.460 million on Sunday.

"The demand hit $11.880 million in cash and $150.635 million in money transfers outside the country, all covered by the bank at an exchange rate of 1,211 Iraqi dinars per dollar, one tick lower than yesterday," according to the central bank's daily bulletin which was received by Aswat al-Iraq- Voices of Iraq- (VOI).

The 13 banks participating in the auction offered to sell $1.2 million, which the bank bought at an exchange rate of 1,209 dinars per dollar.
Speaking to VOI, Ali al-Yasseri, a trader, said that many banks had waited for the decline in the exchange rate to make their remittances, increasing the overall demand in Monday's session.

The Iraqi Central Bank runs a daily auction from Sunday to Thursday.

Aswat Aliraq