Bumar failure is Poilen opportunity
The Bumar contract would have been worth zł.1.7 billion ($450 million) and was intended to supply uniforms, transport and weapons to the re-formed Iraqi army. The tender was lost to Nour USA, who undercut Bumar's price by around zł. 770 million ($200 million). The Nour deal included Poland-based Ostrowski Arms as a subcontractor.
"We can learn lessons from Bumar," says Henryk Żebrowski, president of the Poilen consortium, an alliance of PKN Orlen, Polimex-Cekop, Energobudowa and Polskie Linie Oceaniczne, that may soon be joined by PGNiG, "We must analyze everything that happened, what they did wrong and what their rival did right." Żebrowski's organization is due soon to open a representative office in Iraq, and notices that Ostrowski Arms worked hard at lobbying in Iraq. "We must not only work to secure ties with a larger partner that has many years of tendering experience, but we must also secure our ties with the Iraqis," he added.
Żebrowski hopes that Iraq will become a stepping-stone for Poilen to reach world markets, especially if a good relationship is established through a major American consortium. Żebrowski also points to cooperation with firms from other Middle Eastern countries, namely Kuwait and Jordan.
The news of Bumar's failed bid was met with anger in some circles, including media outlets, where the contract had been anticipated as a reward for the 'blood price' paid by the Polish army's presence in Iraq.
"We couldn't match their offer while abiding by the tender offer," Bumar spokeswoman Roma Sarzyńska told the press, "We plan to demand an explanation, notably concerning the credibility of the company that won the contract."
The excitement around the pitch peaked as President Kwaśniewski visited President George W. Bush in Washington DC last week. The reconstruction of Iraq, and Poland's military and commercial activity there, were high on the agenda.
Despite an enormous degree of expectation of reward among America's coalition partners, the Bush administration and its agencies maintain that at no point did they make any concrete promises of bounty in Iraq. At the Iraq Reconstruction Business Forum in Warsaw in November, Scott Blacklin, vice-president of Washington DC consultancy group Jefferson Waterman International, warned that, "The actual or implied political promises made by the Bush administration concerning the reconstruction of Iraq cannot be implemented."
"The message that is given out by the failure of the Bumar bid should be that there is no preferential treatment or positive discrimination in the process," says Edgar Fulton of the American Chamber of Commerce in Warsaw. "Contracts will be based on normal business principles such as price and merit."
Fulton insists that the U.S. government has made sure that the door is open to qualified Polish companies to bid on Iraq reconstruction contracts. He goes even further, saying that his department is working to "...guide Polish bidders on the process, and there is a commitment to ensuring that Poland has a fair opportunity to participate."
"It isn't hard to understand Bumar's disappointment in the recent bid," says Fulton, "...but this certainly won't lead to any lasting problems in Bumar's good relations with U.S. business partners." U.S.-Polish commercial relations which are, in general, getting stronger.
The members of the Poilen consortium hope to operate in various sectors of industry in Iraq, notably the fuel industry, where PKN Orlen aims to process and produce petroleum. Energobudowa and Polimex-Cekop intend to assist in the reconstruction of the power industry, while Polskie Linie Oceaniczne will provide transport and logistics services.
"We can learn lessons from Bumar," says Henryk Żebrowski, president of the Poilen consortium, an alliance of PKN Orlen, Polimex-Cekop, Energobudowa and Polskie Linie Oceaniczne, that may soon be joined by PGNiG, "We must analyze everything that happened, what they did wrong and what their rival did right." Żebrowski's organization is due soon to open a representative office in Iraq, and notices that Ostrowski Arms worked hard at lobbying in Iraq. "We must not only work to secure ties with a larger partner that has many years of tendering experience, but we must also secure our ties with the Iraqis," he added.
Żebrowski hopes that Iraq will become a stepping-stone for Poilen to reach world markets, especially if a good relationship is established through a major American consortium. Żebrowski also points to cooperation with firms from other Middle Eastern countries, namely Kuwait and Jordan.
The news of Bumar's failed bid was met with anger in some circles, including media outlets, where the contract had been anticipated as a reward for the 'blood price' paid by the Polish army's presence in Iraq.
"We couldn't match their offer while abiding by the tender offer," Bumar spokeswoman Roma Sarzyńska told the press, "We plan to demand an explanation, notably concerning the credibility of the company that won the contract."
The excitement around the pitch peaked as President Kwaśniewski visited President George W. Bush in Washington DC last week. The reconstruction of Iraq, and Poland's military and commercial activity there, were high on the agenda.
Despite an enormous degree of expectation of reward among America's coalition partners, the Bush administration and its agencies maintain that at no point did they make any concrete promises of bounty in Iraq. At the Iraq Reconstruction Business Forum in Warsaw in November, Scott Blacklin, vice-president of Washington DC consultancy group Jefferson Waterman International, warned that, "The actual or implied political promises made by the Bush administration concerning the reconstruction of Iraq cannot be implemented."
"The message that is given out by the failure of the Bumar bid should be that there is no preferential treatment or positive discrimination in the process," says Edgar Fulton of the American Chamber of Commerce in Warsaw. "Contracts will be based on normal business principles such as price and merit."
Fulton insists that the U.S. government has made sure that the door is open to qualified Polish companies to bid on Iraq reconstruction contracts. He goes even further, saying that his department is working to "...guide Polish bidders on the process, and there is a commitment to ensuring that Poland has a fair opportunity to participate."
"It isn't hard to understand Bumar's disappointment in the recent bid," says Fulton, "...but this certainly won't lead to any lasting problems in Bumar's good relations with U.S. business partners." U.S.-Polish commercial relations which are, in general, getting stronger.
The members of the Poilen consortium hope to operate in various sectors of industry in Iraq, notably the fuel industry, where PKN Orlen aims to process and produce petroleum. Energobudowa and Polimex-Cekop intend to assist in the reconstruction of the power industry, while Polskie Linie Oceaniczne will provide transport and logistics services.
