By John Lee.

Saudi Arabia’s King Salman has promised to build a football stadium in Iraq.

The news followed a friendly match between the two countries’ teams in Basra last week.

The Iraqi-Saudi Ministerial Coordination Council met on Monday to discuss the measures needed to improve cooperation in the economic, investment, cultural and other sectors.

(Sources: Asharq al-Awsat, Reuters)

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

By Saleem al-Wazzan.

As Saudis Prepare To Open Basra Consulate, Iran Opens Border To Iraqis

Iraqis can now visit a special visa-free zone in neighbouring Iran, over the border from Basra. Some locals see the open border as a cynical economic and political move that helps Iran, but not Iraq.

An Iraqi passport is one of the most difficult in the world. Only a handful of countries will allow Iraqis to travel there without applying for a visa a long time in advance. But now, Iraq’s next-door neighbour, Iran, has opened some of the areas closest to Basra to Iraqis, that they may access without a visa.

The decision has been greeted with both enthusiasm and cynicism in Iraq. Locals in southern Iraq have often made pilgrimages into Iran for religious and medical reasons and they welcome the decision, even though it only applies to the areas of Khorramshahr and Abadan, which lie directly on the border. Meanwhile local businessmen say it’s a commercial decision that will mainly benefit Iran.

The decision has been made and now Iran is only waiting for the Iraqi government’s go-ahead, Ahmed Sayhaboush, head of mission at the Iranian consulate in Basra, said. He explained that the decision was made in the interests of encouraging friendly relations between the two countries.

Passports will still be stamped at the border, the head of communications at the Iranian consulate, Mohammed Ismail, explained. Iraqis will be able to stay in the visa-free border areas for up to a month and during that time, they can obtain a visa to travel further into Iran if they wish. There will be special crossing points in Khorramshahr and Abadan. Many Iraqis on religious pilgrimage like to go to the shrine of Imam Reza in the city of Mashhad, for example, but this is well out of the visa-free area.

The border authorities have decided to limit the entry times of Iraqis wishing to cross into the visa-free zones to between 6am and 5pm daily, Ali Yousef, a spokesperson for the Basra council, explained further.

“The Iranian move will increase the number of people moving between the two countries and this will benefit both nations” Jabbar al-Saedi, the head of the security committee on Basra’s provincial council, said. “We have however stressed the need to follow up on security controls to prevent any illegals crossing the border.”

One local from Basra, Mohammed Marhoun, believes that the visa-free zones will be good for business. He says he has already purchased a house and an apartment in Khorramshahr and says the process was relatively uncomplicated, compared to the bureaucracy he faced in Iraq. The number of visitors from Iraq into Iran means that there is more construction in border areas to accommodate visitors. The only problem, Marhoun said, was that one did have to have an Iranian name on the deed.

And he is not the only one utilising this opportunity, Marhoun points out. “Members of the provincial council and MPs from Basra have also invested in real estate in the visa-free zones,” he noted. “But they don’t want anybody to know about these investments, which are now being managed by Iranians.”

While businesspeople like Marhoun and investors in real estate might be pleased, there are some observers who are not so enthusiastic. They believe that the move will only benefit Iran in the long run.

It’s just another way to deplete Iraq’s currency reserves and to encourage more consumerism among Iraqis, says Nabil Jaafar Abdul Redha, a professor of economics in Basra. “Even if Iraq now allows Iranians to enter Iraqi cities without a visa nothing will change because there are no local products to be sold to them,” Abdul Redha argues. “So, the Iraqi economy is the loser in this process.”

“Iraqis might benefit from being able to go to Khorramshahr or Abadan and buying Iranian goods at slightly lower prices,” he concedes. “But overall, this does not benefit Iraq.” The main problem is that Iraq doesn’t produce much other than oil – it remains what is known as a rentier economy, one that is basically dependent on exporting oil to fuel its economy. Most manufactured goods are imported, in exchange for the money the oil raises.

“Our economy is not as diversified as Iran’s,” Abdul Redha tells NIQASH. “So, any commercial exchange with our neighbours – that includes Iran, Turkey or Saudi Arabia – tends to be one sided.”

There has been an influx of Iranians into Iraq in recent years for religious reasons. But that doesn’t outweigh the trade balance, he adds.

“The number of Iraqis entering Iran every day numbers between 2,000 and 3,000,” posits Abdel-Saheb Saleh, deputy head of an association for Basra’s businesses. “If we estimate that each of them will spend between US$100 and US$500 over there, that’s a good income for Iran.”

Saleh thinks the visa-free areas could be a positive for another reason. Iraq has been isolated for a long time due to security and political issues, Saleh says. This could be seen as a positive message to other regional governments who block the entry of Iraqis. “For example, a visa to visit Kuwait costs US$1,800 on the black market,” he complains.

Meanwhile local man, Ahmad Fadel, a civil society activist who recently visited what will be the visa-free zone, isn’t that impressed. For one thing, he says, the Iranian border guards treat the Iraqis crossing into their country badly. For another, there’s not much in Khorramshahr or Abadan that could really attract tourists. “The cities have poor infrastructure,” he notes.

And Fadel has another theory as to the reason behind the visa-free zones. He believes it may also be the Iranian reaction to Iraq’s new détente with Saudi Arabia, a country the Iranians tend to see as a geo-political rival. Saudi Arabia is about to reopen its consulate in new premises in Basra; it closed the original one way back in 1990.

By John Lee.

Iraq’s National Investment Commission (NIC) has included the “Grand Port of Al Faw” in its list of major strategic projects to be presented during the Kuwait International Conference for Iraq Reconstruction, to be held in Kuwait from 12th to 14th February:

Project cost: $6 billion

Location: Basra

Design capacity:

  • Phase one 2018: containers: 24 million ton/year, unpacked materials/ 24million ton/year
  • Phase two 2028: containers: 40 million ton/year, unpacked materials/ 32 million ton/year
  • Phase three 2038: containers: 70 million ton/year, unpacked materials/ 44 million ton/year

The project includes:

  • Eastern breakwater 8km
  • Western breakwater 15km
  • Two lines for containers berth 3.5km each 12 berth to each line total 24 containers berth and area for containers storage.
  • 13 Berths for unpacked materials (grains, cement..etc.) 3.5km with conveyor belts
  • Berths for Oil products export and import (outside the port basin)
  • Roads and railways
  • Area for buildings and trucks (around 4km²)
  • Navigational channel 30km length, 17m depth.
  • Berths for various goods 4.5km (22berths)
  • industrial zone (approximately 8.5km²)
  • depth in the port basin is 15-17 m

The full 46-page document can be downloaded here.

(Source: NIC)

By John Lee.

Iraq’s National Investment Commission (NIC) has included four subway and metropolitan rail projects in its list of major strategic projects to be presented during the Kuwait International Conference for Iraq Reconstruction, to be held in Kuwait from 12th to 14th February:

1. Baghdad Metro

The project consist of two lines with total length of 46km. it has 47 station, two locomotive garages on both lines, and three power transferring stations.

  • The first line (23km 25 station) starts from the main locomotive garage north east of Baghdad through (10*10) project location –previously, to Al Sadir city crossing Al Thawra St. heading to Baghdad center to Al Jimhoriya St. to its final destination Antar Sq.
  • The second line (23km 22 stations) starts from south east of Baghdad near Aqaba Bin Nafee Sq. –Sadoon St. City center, crossing the Tigris to reach Al Faris Al Arabi Sq. forming two branches, one to Al Mansoor and the other to Al Bayaa where the second locomotive garage is located.
  • The project can provide comfortable and efficient transportation services to 250 thousand passenger/h in all stations.
  • Ministry of Transportation contracted a number of specialized consulting companies in the mid-seventies to conduct a study regarding Mass Transit that resulted to using tracks according to the feasible study done in 1978 (Feasibility study and Preliminary Design of an integrated Transport System within the City of Baghdad)
  • A contract was signed with Sestra Co. (French), one of the specialized international companies, to conduct the initial designs and the tender documents under the title (Technical, Legal and Contractual Requirement for Baghdad Metro Project)
  • The estimated cost of the project including detailed designs and execution of the two lines excluding extensions is €5.7b which is roughly $6b according to the French Co. feasible study adding to that $2b for acquisitions, total cost will be $8b. EPC document was based on turnkey delivery system.

2. Baghdad Mono Rail

A vital project with good financial revenues, prepared by French Alstom Co.

  • Estimated cost: $ 1.5b
  • Duration: 5 years
  • Project purpose: to solve traffic jams and improve services in Baghdad.
  • Phases, locations, implementation lines in Baghdad
  • Phase one: 15.5 km, Kadhmiya-Al Sadir City-Shaab, with 12 internal station and crossing the Tigris
  • Phase two: 4.45km, the International Station in Alawi-Utaifiya with two internal stations.

3. Mono Rail in Holy Karbala Province

This project is considered to be one of the major strategic projects in Holy Karbala Province for its importance in resolving the transportation problem of visitors coming to the Holy city. The project starts from the station Bada’at Aswadin Al-Husainiya District and going toward the Baghdad road taking the middle path of the main road toward Bab Twerej and passing through Al-Salam bridge and then through Al-Ibrahimiya station.

  • Length:18 km/ dual line/ 20 passengers stations.
  • Estimated cost: 450 million dollars.

4. Basra Metro

This project is considered to be one of the major strategic projects in Basra Province for its importance in resolving the transportation problem.

  • The metro contains 5 main lines with 35 main and branch lines
  • First line: Sa’ad square-Basra University-can be extended to the city center.
  • Second line: sa’ad square-Zubair-can be extended to Safwan
  • Third line: Sa’ad-Al-Ashar-Shalamja
  • Fourth line: Sa’ad square-Abu Al-Khaseeb-Faw
  • Fifth line: Sa’ad square-14th July street-presidential palaces.

The full 46-page document can be downloaded here.

(Source: NIC)

By John Lee.

Iraq’s Ministry of Electricity has reportedly awarded a contract to Japan’s Mitsubishi Hitachi Power Systems (MHPS) to refurbish the Unit 1 of the Hartha thermal power station (pictured) in Basra province.

According to Energy Business Review, the power station is claimed to account for approximately 25 percent of Basra’s total power generation capacity.

It’s original equipment was developed by Mitsubishi Heavy Industries (MHI).

Funding will be provided by Japanese Official Development Assistance (ODA) through the Japan International Cooperation Agency (JICA).

Mitsubishi Electric will be responsible for the generator-related work, while the Turkey’s Gama Power System will be responsible for installation and other work.

The work is scheduled to be completed in 2020.

(Source: Energy Business Review)

Swiss-based Mövenpick has signed a deal to manage a five-star, 152-key hotel in Basra, Iraq”s economic capital and a regional oil and gas hub.

The Mövenpick Hotel Basra is scheduled to open in the first quarter of 2018. Located in the center of Basra, within the commercial district of Al Baradi’yah and 25km west of Basra International Airport, the new property will help to fill a gap in the market for upscale hotels.

Olivier Chavy, President & CEO, Mövenpick Hotels & Resorts, said:

Basra is one of the Middle East”s fastest-growing economic centres, a major oil producer and is undergoing rapid infrastructure development, so the time is right for Mövenpick to cement its presence in this flourishing city.

“Our upcoming property will cater to pent-up demand from the corporate sector, which contributes around 90% of hotel demand in Basra due to the high volume of oil and gas and shipping companies based in this booming region of Iraq.

Amenities at the Mövenpick Hotel Basra will include one all-day dining and one specialty restaurant; an executive lounge and a lobby lounge; a meetings and events area featuring a 700-square metre ballroom, multi-functional hall and meeting room; an indoor swimming pool, gym, spa, and beauty salon; and a retail area.

Mr. Akeel Ibraheem Al-Khalidy, Chairman of the South Group Corporation and Chairman of the Committee on Economic Development and Investment, part of Basra Council, said,

“With tens of thousands of foreign workers and businessmen travelling in and out of Basra every day and thousands more based in the city, Mövenpick Hotel Basra will be well placed to provide them with high-quality business, dining and leisure facilities and accommodation that set new hospitality standards in this thriving area of Iraq.”

(Source: Movenpick)

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

A soil barrier built to protect Basra’s farms and oil fields from polluted water flushed out of Iran is leaking. It’s the latest in a long list of water woes between Iran and Iraq.

A soil bund established to prevent the seepage of poisoned water from Iran into Iraq, in the Basra province, is starting to leak. It protects Iraqi land in Basra from a highly saline pool of water that stretches from the Shalamijah border crossing to the Majnoon oil fields.

“The damage that this lake filled with run-off could do is enormous,” says local researcher Kathem al-Ghilani. “That’s because the run off comes from private fish farms and sugar cane farms and the amount of water is huge.”

After looking at satellite imagery, al-Ghilani believes that the Iranian water comes mostly from farming. “When Iran harvests its sugar cane, it empties farms of water and this water contains fungicides and pesticides. It’s highly toxic. There is also waste water from petrochemical plants, oil refineries and Iranian plastic factories,” he explains.

Al-Ghilani says that some of this water has already leaked into Basra, via the waters of the Shatt al-Arab inlet. This is where the Tigris and Euphrates rivers meet and empty into the sea, but in recent years a reduced flow of water from the rivers has seen the salt water creep inland.

The Karun river, which flows from Iran, is another tributary to the Shatt al-Arab and it also brings polluted water from the neighbouring country. The Iranians have previously denied flushing polluted water into the Karun.

Now the potential collapse of the soil berm is causing even more concern. There are cracks in the 80-kilometre berm and the leaks stretch for 50 kilometres. Farmers have already been forced off their land by increased salinity and pollution to freshwater, and there is fear that more may be pushed out of agriculture. Land used by oil companies is also at risk.

US-based Jacobs has signed a Memorandum of Understanding (MOU) with the Iraq Oil Company to explore mutual benefits of cooperation in the region of Basra, Iraq.

The vast majority of Iraqi oil production takes place in Basra. Iraq Oil Company is looking for business partners based in the Kingdom of Saudi Arabia to support economic and social development in the Basra region through investments in upstream, downstream, refining, and other sectors.

David Zelinski, Jacobs Petroleum and Chemicals Senior Vice President and General Manager Middle East, said:

Jacobs was selected as single engineering partner to sign this strategic non-binding agreement.

“We will explore possibilities to deliver our services in support of the Oil & Gas, Refining and Petrochemicals sectors in Iraq, from our Saudi Arabian office – where we have had a presence for more than 40 years – as this aligns well with the Kingdom’s Vision 2030 to increase the export of services.

The signage took place during a business event attended by HH Khalid Al Faleh, Minister of Energy, Industry and Mineral Resources of Saudi Arabia and Chairman of Saudi Aramco; Jabbar al-Luaibi, Iraq Minister of Oil; Asad Al Eidani, the Governor of Basra; and Abdulaziz Al Shammary, the Saudi Ambassador in Iraq.

The governments of Iraq and Saudi Arabia work closely together to establish a clear regulation and warrantees for potential investors in terms of protection, trading and financial transactions.

(Source: Jacobs)

French company Alstom has signed a Memorandum of Understanding (MoU) with Iraqi government for the development of urban transport in Baghdad and Basra.

The MoU was signed during the Franco-Iraqi government authorities meeting, in the presence of Dr.Sami Al Araji, Head of National Investment Commission (NIC) of Iraq and Jean-Baptiste Lemoyne, French Secretary of State.

The MoU covers two major projects. The first project is to implement a 20 km Elevated Train in Baghdad, with the supply of rolling stock, electromechanical systems, tracks, associated civil works. The light rail system would link Al-Mustansirya, AlShab, Al-Wazyria, Alsarafia AlEtafia bridge, Al-Khadumia, AlMuthana airport and Al-Alawi.

The second project focuses on the development of the Metro System in Basra, which consists of two elevated lines of approximately 30km each, 15 stations and one depot for each line from North to South, from Zubair to Shat Alarab and from East to West, from Karma to the Desert.

These projects would significantly contribute to the development of the country’s urban infrastructure and national economy.

“We appreciate the opportunity to develop industrial cooperation with the Republic of Iraq, in order to better address the country’s needs for urban transportation. Alstom is ready to bring its innovative technologies and sees the signature of this MoU as a first step towards the development of a long-term partnership with Iraq”, said Bernard Peille, Managing Director of Alstom in Western & Central Asia.

Alstom is already well established in the Middle East & Africa Region with more than 3,800 employees, 1,800 suppliers and present in more than 15 countries in the region with offices and joint-ventures in Algeria, Morocco, South Africa and Kazakhstan.

(Source: Alstom)