Iraq: Siemens Lands $95M Deal

German company hired to build power station as United States moves to 1310share reconstruction work

LONDON - German industrial company Siemens AG has won a $95
million deal to develop a power station in Iraq, an industry source
said Friday, days after Washington vowed to share post-war
reconstruction work.

The source was confirming a remark made earlier in the day by
Britain's trade, investment and foreign affairs minister, Mike
O'Brien, who told reporters at a London conference that Siemens had
just been awarded a "substantial contract for a power station."

"Siemens won a contract to build a gas turbine...," the industry
source said, adding the work was being sub-contracted by U.S.
engineering and construction company Bechtel. The turbine has a
generation capacity of 266 megawatts of power, the source said.

San Francisco-based Bechtel is lead contractor for the U.S. Agency
for International Development and has so far racked up more than $1
billion in work to rebuild the country's schools, bridges, and power
and water infrastructure.

The industry source also said Siemens had already won subcontracts
worth about $50 million in Iraq.

A spokeswoman for Siemens UK told Reuters in London that the company
was in talks with Bechtel but added: "As yet there is no formal
contract in place." She gave no more details.

Washington pledged Wednesday open and fair competition for at least
25 new Iraq contracts worth up to $18.7 billion. It said bidding
would be open to firms from the United States, Iraq and from
countries that participated in the war effort.

Germany was one of the most vociferous opponents in Europe of the war
in Iraq. It teamed up with France and Russia in opposing the U.S.-led
attack on Iraq in March.

The Siemens news may
show companies that the U.S. pledge to share out the work to rebuild
post-war Iraq is genuine.

Some companies attending the conference in London on the rebuilding
of Iraq also said they were cautiously optimistic after comments by
retired Rear Admiral David Nash, who heads the new Baghdad-based
office that will coordinate the contracts.

Nash said the prime work would probably go to companies from Iraq and
"coalition partners" who helped overthrow Saddam Hussein.

"It is his wish to get as many of the coalition partner companies
involved, that is just a fact," said Ian Thomas, from British firm

AMEC, in a joint venture with the United States' Fluor Corp., is bidding for around $5
billion in work in Iraq, he said.

"[But] I think the procurement rules in the States might hamper him,"
Thomas added.

Non-American companies have complained that they cannot qualify for
many primary rebuilding contracts in Iraq because the U.S.
procurement rules make it difficult for them.

After much behind-the-scenes lobbying from British government
officials, the U.S. Agency for International Development (USAID) bent
its own rules and said foreign companies would get as much as half of
the reconstruction work in subcontracts.

AMP Section Name:War & Disaster Profiteering

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