UK push for Iraq building contracts

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The Independent Online

Trade and investment minister Mike O'Brien is to visit Washington in November to secure a bigger slice of the pie for British companies in the massive contracts being awarded for Iraq's reconstruction.

So far, money printer De La Rue, Standard Chartered bank, and security company Erinys have secured contracts. But the bulk of the money has gone to American companies with close connections to the Bush administration, such as Halliburton, the oil services company formerly run by US vice-president Dick Cheney.

With an additional $20bn (£11.7bn) in US money now being allocated for reconstruction, the pressure is on to ensure some of that money flows to UK firms. Companies in the electricity sector could be the leading beneficiaries, with some $5.7bn allocated for electricity infrastructure. Building drinking water and sewerage systems receives $3.7bn, while $2.1bn is earmarked for the oil sector.

Under US law, any contracts financed by American taxpayers have to be awarded to US companies. But there's plenty of room at the subcontracting level for UK companies to pick up business.

Bechtel, the privately owned California-based construction firm that has won one of the biggest contracts so far at over $1bn, said last week it had awarded a total of 147 sub-contracts. Iraqi companies picked up 109 of these, just eight have gone to UK firms.

UK trade officials hope to use Tony Blair's staunch support during the war as leverage to secure more business for British companies. But Mr O'Brien arrives amid a domes- tic furore over funding for the reconstruction process, shedding doubt on how much money will be available, who will be charge of spending it it and how. The Senate insists at least half the $20bn being allocated should be a loan rather than a grant; the White House has retaliated by threatening to veto the bill.

Several UK companies complain of the immense complexity of the contracts. When combined with the perils of sending staff into a highly unstable region, many won't be joining the gravy train soon. "Some companies are despairing of ever doing any work in Iraq," said Rhian Chilcott, representative for the CBI in Washington.