Local firms annoyed by north Iraq ‘kamikazes’

Tuesday, November 15, 2011
Gökhan Kurtaran
ISTANBUL- Hürriyet Daily News

Turkish companies criticize Iraqi authorities for handling reconstruction businesses to incapable companies. These ‘kamikaze firms’ bid with the lowest offer and eventually win tenders but cannot fulfill their responsibilities, they say. ‘We need more foreign investment to recover,’ Iraqi public works minister tells the Daily News



Security forces inspect a bomb attack site in Baghdad in April 2010. The country is seeking partners to support its reconstruction. AP photo

Iraqi government officials are handing urban development and construction projects to “kamikaze firms,” which are insufficient for low prices, according to a group of executives from Turkish firms.

“Kamikaze firms bid with the lowest offer and eventually win the tender,” said Mustafa Toprak, business development director of Kayı Construction, which opened a representation office recently in Bagdad.

These firms are generally unqualified and are incapable of finishing projects on time successfully, he told the Hürriyet Daily News on the sidelines of the two-day Iraq Urban Development Summit, which started yesterday in Istanbul.

“This is one of the reasons some Turkish firms like us are losing contracts in Iraq as those bidders do not even worry about the timing and the quality of the project.”

There are nearly 600 Turkish construction companies running projects in Iraq, and some of them lose tenders due to competitors who take significant risk without planning for real costs, according to Naili Musabeyli, group manager of Yüksel Construction.

“Recently Iraqi officials have also started to understand this situation and are preparing to make changes in the tender specifications,” he told the Daily News.

His company is building the main road connecting Iraq’s northern province Arbil to northern provinces Kora and Şaklava. The road is expected to cost nearly $180 million. Musabeyli said Yüksel Construction is also interested in bidding for water and sewage tenders in central and southern parts of the war-torn country.

Ministry encourages Turkish firms
The Iraqi government is encouraging more Turkish construction companies to take part in rebuilding the country, said Adel Mhodr Radi, Iraqi minister of municipalities and public works.

“Iraq has been widely damaged due to war and we need more foreign investment to recover,” he told the Daily News, noting that Turkish construction firms rank among the top companies in terms of the quality of their work.

After years of war and sanctions, Iraq is now in a position to rebuild its social infrastructure of housing, road networks and power and utility installations. Iraq’s investment budget needs to increase to 60 trillion dinars ($51 billion) from a planned 40 trillion dinars to ensure funds for new projects, said Ali Al-Shukr, Iraqi minister of planning, in a June report.

SAUDI FIRM SEEKS TURKISH PARTNERS FOR TENDER
The Al Turki Group, a family-owned Saudi investment and development company, could bid for the right to construct the Riyadh and Jeddah metro lines in concert with Turkish firms, said a top executive.

Majdi Khayyat, vice president of Al Turki Group, told the Hürriyet Daily News yesterday on the sidelines of the Iraq Urban Development Summit that his company had proposed that some Turkish construction firms, including Yüksel Construction, enter a joint bid with the Saudi firm for the Riyadh and Jeddah metro lines.

“We are already running many projects with Turkish firms in Saudi Arabia, and I am interested in bidding for tenders in Iraq with Turkish firms,” Khayyat said.

Last year, Saudi Arabia announced that the country would open a tender for a 180 km-long Jeddah metro which would consist of three lines and connect Old Makkah Road, King Abdulaziz International Airport and Palestine Road.

Tuesday, November 15, 2011