French and German firms shut out of Iraq reconstruction

11.45am - By SUE PLEMING

WASHINGTON - US Deputy Defence Secretary Paul Wolfowitz has ruled that lucrative, prime contracts to rebuild Iraq must exclude firms from nations such as France and Germany that opposed the US war effort, said a document released on Tuesday.

The announcement followed discussions over which countries should benefit from a slew of reconstruction contracts to be advertised in coming days that are being funded by US$18.6 billion appropriated by the US Congress.

The decision, while not identifying any countries by name, shuts out companies from nations that opposed the US decision to invade Iraq and topple President Saddam Hussein without UN approval. Those countries may apply for subcontracts.

"It is necessary for the protection of the essential security interests of the United States to limit competition for the prime contracts of these procurements to companies from the United States, Iraq, coalition partners and force contributing nations," Wolfowitz said in a notice published on an Iraqi rebuilding website (www.rebuilding-iraq.net).

Some officials had argued privately the United States should not limit international competition to rebuild Iraq, where the infrastructure has been shattered by years of neglect, war and post-conflict looting and attacks.

The rollout of tenders to rebuild Iraq has been delayed in recent days while "high-level" policy decisions were being taken on Iraqi reconstruction and as lawyers checked that the final wording complied with US procurement laws.

Wolfowitz said that since May, coalition forces in Iraq other than those from the United States had increased to 23,700 from 14,000, while US troops levels had dropped.

"Limiting competition for prime contracts will encourage the expansion of international cooperation in Iraq and in future efforts," wrote Wolfowitz.

Companies likely to benefit most from the decision come from Britain, Japan, Italy, the Netherlands, Australia, South Korea and Poland.

Other supporters of the war effort include Albania, Bulgaria, Denmark, Honduras, Hungary, Kazakhstan and the Philippines.

The first round of reconstruction contracts to rebuild Iraq was limited to US firms, with oil services company Halliburton, once run by Vice President Dick Cheney, and San Francisco company Bechtel the dominant players.

A defence official said he expected the new contracts to be advertised on government websites later on Tuesday or on Wednesday. Bidders' conferences are expected later this month and contracts are set to be awarded by February 3.

The contracts cover electricity, communications, public buildings, transportation, public works and security and justice. Additional contracts are also being awarded to oversee those projects.

- REUTERS


Herald Feature: Iraq