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Bechtel opts for Iraqi firms

01 July 2003

Bechtel, the US firm given the prime contract to rebuild Iraq, will farm out most subcontracts to Iraqi firms, not the thousands of foreign ones clamouring for a share, a company executive has said.

Bechtel is determined to hire Iraqi firms to help rebuild the country and might even lend them cash to get the job done.
Tom Elkins, the executive in charge of procurement for the private contracting giant, said most reconstruction work so far was being carried out by firms from the US and Britain, the countries that led the war to oust Saddam Hussein.
But Elkins said on the sidelines of a World Economic Forum meeting in Jordan that the pace of awarding contracts to Iraqis was picking up. 'We are very aggressive, very aggressive about this,' he said.
Bechtel drew thousands of firms looking for a share of the work to three roadshows in the US, Europe and the Middle East. But senior vice president Cliff Mumm, who is directing the contract - worth potentially $680 million - said foreign firms would be tapped only for equipment not available in Iraq or for top-end design or engineering services.
'The whole idea is to spend this money to get the economy up and operating. That means you should spend it in Iraq,' he told reporters.
Bechtel, based in San Francisco, awarded its first subcontract recently to Al-Bunnia Trading Company, a 93-year-old Baghdad firm.
Bechtel has asked the Iraqi Federation of Contractors to supply a list of big local firms.
Mumm said the biggest of several subcontracts already awarded had gone to the US Great Lakes Dredge and Dock Company to clear Iraq's only deep-water port at Umm Qasr.
So far, the US government has authorised Bechtel to spend no more than $147 million, Mumm said, though the private firm's contract could reach $680 million before it expires at the end of 2004.
He estimated about 90 per cent of the engineering work would be subcontracted to Iraqi firms, and would try to see that Iraqis got a similar proportion of the general contracting work, too. Some Iraqi companies are in joint ventures with Turkish and east European partners.
He said Bechtel would soon sign subcontracts for bridge repair and school refurbishment. The firm is also charged with reopening Iraq's international airports in Baghdad and Basra, and rehabilitating its power, water and sewage systems.