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Arabtec in box seat for Iraq project
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The National - [7/21/2010]
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Arabtec Construction is considering plans to build a 100,000-seat stadium on the outskirts of Baghdad as the Iraqi government seeks to rebuild the country.
Tom Barry, the chief executive of Arabtec Construction, a unit of Arabtec Holding, said the company had recently been approached about the stadium project.
Arabtec, which built the Burj Khalifa in Dubai in partnership with Besix and Samsung, is among a number of UAE contractors pondering a move into Iraq, although no major companies are working there yet.
“We considered it a couple of times in the past but decided against it because of the ongoing security situation,” said Mr Barry.
“We were recently asked to look at the stadium project so are now looking at the main requirements.”
He added the stadium would be developed using the design and build concept, which is meant to minimise project risk for the client and quicken delivery by overlapping the design and construction phases.
Investment has started to trickle into Iraq as the security situation there eases, while roads, schools, hospitals and homes are being built as part of a US$180 billion (Dh661.17bn) reconstruction plan.
Sami al Araji, the chairman of Iraq’s National Investment Commission, said in May that UAE companies were considering plans to build 150,000 housing units throughout the country, adding the projects under discussion were worth $70bn.
But for the most part, contractors have been reluctant to seek work in Iraq due to the continuing security risk. Al Habtoor Leighton is the only major UAE company actively chasing work in the country.
Laurie Voyer, the company’s managing director and chief executive, said in May that it was bidding for a construction package worth $700 million in Iraq’s oil sector to capitalise on the country’s plans to expand oil production.
A spokesman said the company was waiting for a final decision on the contract but was still looking for new work elsewhere in the region.
“Generally, people have a view that there are going to be opportunities in Iraq eventually,” the spokesman said. “But at the moment there are opportunities elsewhere that don’t have the same complications.”
Imad al Jamal, the vice chairman of the Higher Technical Consultative Committee for the UAE Contractors Association, said most contractors were just “feeling the ground” in Iraq.
“I think it’s going to be some time before people move in but I don’t think you’ll have a serious migration of contractors going there,” Mr al Jamal said. “There’s still political uncertainty and security risk.”
A few UAE developers announced plans for projects in Iraq in 2007 and 2008, just before the global financial crisis took hold. Among them were Abu Dhabi’s Al Maabar and Bloom Properties and Dubai’s Damac Properties.
Deyaar Developments said last year it was considering a move into Iraq.
But expansion plans have been set back by the crisis, with most developers instead concentrating on finishing projects at home.
“Iraq is something that intrigues people but there’s a lack of information … in terms of what to expect when they go into Iraq and how to secure a project,” said Lisa Dale, a partner and the head of property at Al Tamimi and Company, a UAE-based law firm that opened an office in Iraq in 2005.
“Companies also have a whole host of issues and questions surrounding things like land ownership, whether they can register a mortgage and political stability.”
Ms Dale added the UAE needed some “bold pioneers” to take the plunge. “Because once you get one or two, the others will follow suit quite quickly.”
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