The American government is on the verge of awarding construction
contracts worth hundreds of millions of dollars to rebuild Iraq once
Saddam Hussein is deposed.
Halliburton, one of the companies in the running for the highly
profitable deals, was formerly headed by the US vice-president, Dick
Cheney. Halliburton has already been awarded a lucrative contract to
resurrect the Iraqi oilfields if there is a war.
Other companies have strong ties to the US administration, including
the construction giant Bechtel, the Fluor Corporation, and the Louis
Berger Group, which is involved in the reconstruction of Afghanistan.
Only US companies are on the shortlist of five. The US Agency for
International Development (USAID) defended the narrow shortlist.
A spokeswoman said: "Because of the urgent circumstances and the
unique nature of this work, USAID will undertake a limited selection
process that expedites the review and selection of contractors for
The spokeswoman said that it was a policy of USAID to use US
companies for projects funded by the American taxpayer. Non-US
companies were free, through their governments, to organise their own
business, she said.
The winning company would get about $900m (Â£563m) to repair Iraqi
health services, ports, airports, schools and other educational
Sources at the companies said the invitation was unusual in that
USAID did not ask them to set a price for defined services but rather
asked them to say what they could do for $900m.
All five bidders have submitted their proposals or are preparing to
do so after USAID "quietly" sent out a detailed request soliciting
proposals from the likely bidders.
According to the Wall Street Journal, the Iraq reconstruction plan
will require contractors to fulfil various tasks, including reopening
at least half of the "economically important roads and bridges" -
about 1,500 miles of roadway within 18 months.
The contractors will also be asked to repair 15% of high-voltage
electricity grid, renovate several thousand schools and deliver 550
emergency generators within two months.
Construction industry executives said the handful of firms are
competing fiercely in part because they believe it could provide an
inside track to postwar business opportunities. The most highly
sought-after prizes are oil industry contracts.
The US government is believed to be wary of any backlash against an
invasion and is preparing plans for a "hearts and minds" operation
that will swing into place as soon as the country is occupied. The
government is mindful of the long-term benefits of feeding hungry
Iraqis, delivering clean water, and by paying teachers and health
"It's a sensitive topic because we still haven't gone to war," said
one industry executive. "But these companies are really in a position
to win something out of this geopolitical situation."
It remains unclear whether Iraqis, Americans or an international
consortium will manage the oil industry during an early post-conflict
Steven Schooner, a George Washington University law professor, said
many billions of dollars are at stake. He estimated that $900m would
barely last six months given the scope of the projects the
administration has sketched out.
"The most sophisticated firms that come in first, and establish good
will with the locals obviously will reap huge benefits down the
road," said Mr Schooner.
"These are going to become brand names in Iraq. That's huge."