Global Policy Forum

Britain Now Enters a Coalition in Contracts


By Sanjay Suri

Inter Press Service
February 20, 2004

About this time last year the Anglo-American coalition was well on its way to planning joint operations for the invasion of Iraq. And now joint operations are being proposed for the reconstruction of Iraq.

It has not been that way so far, with U.S. giants Halliburton and Bechtel hogging the biggest of the contracts within Iraq. But now the British are reminding decision-makers in the United States that they are their prime coalition partner.

The British still do not believe they will get a chance to go it alone. A year on a joint Anglo-American entry into Iraq is taking shape by way of a joint bid by the British energy and construction company Amec along with the U.S. company Fluor for 3.8 billion dollar contract to rebuild electricity infrastructure in Iraq. Amec is the leading company in the joint offer. A decision on the giant contract is due in March.

British foreign trade minister Mike'O Brien is reported to have put the case for British companies strongly to senior U.S. officials in Washington this week. O'Brien is accompanied by Brian Wilson, who is British Prime Minister Tony Blair's special representative on overseas trade. The ministers are moving after a strong push by industry. "We support all the moves the ministers are now making on behalf of British industry," a spokesman for the Confederation of British Industry (CBI) told IPS. The CBI is the leading group that represents British industry.

"We want our industry to get a fair share of the Iraq contracts," he said. "British firms were overlooked in the last round. We hope this is not repeated in the next round."

The Guardian newspaper reported last week that British leaders were getting alarmed over the lack of any major contract for a British firm. "Despite extensive lobbying by ministers and officials for significant UK content in these projects, none of the UK bids were successful," says an internal government note quoted by The Guardian. O'Brien is quoted as saying in another note that "all ministers in the government who are in frequent touch with their U.S. opposite numbers (need) to ensure that the U.S. administration are in no doubt about the political importance we attach to UK firms being seen to contribute actively to the reconstruction process."

Seventeen new contracts are being proposed for reconstruction in buildings, security and other areas. British companies are now making bids with U.S. partners for several of these. The British are picking their partners with care; Fluor is reported to have close links with the Republican Party.

The British moves come simultaneously with a decision Thursday to contribute 120 million dollars to the International Reconstruction Fund Facility for Iraq. This facility is managed by the World Bank and the United Nations. Britain pledged close to one billion dollars at the Madrid donors' conference in October last year for the period from April 2003 to March 2006. The 120 million dollar payment is a part of that commitment.

But Britain is weighing what it spends in relation to what it can get back, and how the money is getting spent. Any further contributions "will be considered in view of the effectiveness of their operations and their need for additional funding," says a note from the Department for International Development (DFID). "But whatever aid we give to this facility will not be tied to British projects," a spokesman for DFID told IPS.

It is clear nevertheless that the British government no longer wants only to pay for the reconstruction of Iraq. "Iraq's human capital, and its oil reserves of about 2,500 billion dollars at current prices, should enable it to meet its future needs without significant external grant assistance," DFID says in a note.

The Coalition Provisional Authority that runs Iraq has set out an 18.6 billion dollar budget for reconstruction and security provisions in Iraq. The security provisions include recruitment and training of a new police force and military. But while British companies join the bidding process, several British companies are not making moves to Iraq in view of the security situation. Deadly attacks recently on a police and an army recruitment centre were a clear message what the targets of the opponents of the present regime might be.

Attacks on oil installations and on all perceived members or allies of the coalition are stopping many large companies, and also small and medium businesses from bidding for business in Iraq, a senior official acknowledges. Business groups entering Iraq are counting on an improvement in the security situation soon. But it is a gamble. Their slice of the Iraqi cake could turn sour. The bigger the slice, the more in it that will be sour.

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