Financial Times FT.com

THE PITFALLS AND PERILS OF IRAQ'S RECONSTRUCTION CONTRACTS

By James Drummond

Published: April 14 2005 03:00 | Last updated: April 14 2005 03:00

When Amec, the construction group, became the only British company to win one of the 19 so-called prime contracts to manage $18.4bn (£9.7bn) to reconstruct Iraq, it provoked some grumbling, writes James Drummond.

Amec's subsequent 50 per cent share of a $500m contract alongside Fluor, the US contractor, to rebuild parts of Iraq's power network, has looked less appealing. Amec is mainly working in the south of Iraq, which falls under British military control, but has admitted that security conditions have hampered progress. Other British contractors have steered clear of Iraq. Costain has won three smaller contracts in Iraqi Kurdistan but the north of the country is largely peaceful. The bidding process for the prime contracts was complex and the scale of the reconstruction discounted all but the biggest international companies.

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