Belka gives Iraq contract hopefuls a reality check
By Karol Chlipalski
Marek Belka, the former finance minister recently appointed Iraq Reconstruction Committee chairman, is trying to calm the expectations of businesspeople regarding prospects for winning fruitful Iraq reconstruction contracts.
"The international community will have to accept a significant reduction of Iraqi debt, which would amount to $400 billion," he said, adding that all speculation concerning potential access to oilfields by Polish companies as part of debt repayment is unfounded and absurd. Iraq's debts to Poland amount to $90 million (zł. 340 million).
"We will have easier access to those opportunities in the Polish zone," Belka said, referring to the part of Iraq that will soon fall under the supervision of Polish forces. Belka's position will prevent him from backing Polish companies, but he said he would keep the domestic business community informed as to what the requirements would be.
Nevertheless, Belka says that the reconstruction of Iraq is an opportunity for Polish companies to get back on the international market. "If we succeed in establishing ties with giants, we can exploit this advantage later on," Belka said during a seminar on June 9.
The seminar, attended by businesspeople representing major Polish industrial companies hoping to get involved in Iraqi operations, was set up by the Warsaw branch of American legal firm Dewey Ballantine in conjunction with PKN Orlen, a major central European fuel producer based in Płock.
"As one of the few American legal firms in Poland, we realized that there is no discussion about the practical aspects of the involvement of Polish companies," said Jarosław Grzesiak, managing partner at the Warsaw office of Dewey Ballantine. "But a good political atmosphere should not affect the fact that Polish companies are prepared from the formal point of view."
Grzesiak also said that many Polish companies could face a cash problem as they may not be able to afford all the costs connected with having operations in Iraq: a 10-percent performance bond required for all contracts, insurance, transportation costs, hotels and many other costs.
Zbigniew Wróbel, head of PKN Orlen, used this opportunity to announce that the company had registered itself as an official subcontractor for Bechtel, an American corporation that has been recently awarded U.S. government contracts for managing all structural and infrastructural undertakings in Iraq financed by the United States, amounting to $680 million
(zł. 2.5 billion). The American company said that its subcontractors can count on $612 million (zł. 2.3 billion) worth in contracts, but there are 4,348 companies from all over the world that have registered for that purpose.
Bechtel is one of the world's largest engineering-construction firms. In 2002 the company logged $11.6 billion (zł. 43.6 billion) in revenue.
At the seminar, PKN Orlen and Polimex-Cekop announced that Orlen had purchased a 25-percent stake in Poilen, a subsidiary of Polimex Cekop, for an unknown sum. Wróbel explained that Poilen would be an operator for a consortium created last month to strengthen the position of Polish companies in the race for Iraq contracts. Wróbel also said that both companies are currently negotiating with Budimex, Energomontaż-Południe SA Katowice, Energobudowa and Alstom Power regarding their joining of the Poilen consortium.
"I hope this transaction will be followed by our other partners, such as Budimex and Energomontaż Południe," said Konrad Jaskóła, the head of Polimex-Cekop.
