Companies clamor for contracts in Iraq

By Timothy Sifert

As the recent U.S. military presence in central Baghdad has further drummed up ancillary excitement about impending business opportunities for Polish companies in a postwar Iraq, market watchers and hopeful participants are beginning to realize that the tender process, a collaboration between Polish companies and other coalition members, might not go as smoothly as expected.

Most recently, the precise relationship between state-owned Rafineria Gdańska (RG) and U.S.-based oil services company Kellogg Brown & Root (KBR) is beginning to be called into question - by Texas-based KBR itself. Paweł Olechnowicz, RG's president, recently announced that he had talked with the deputy president of KBR, but the American company denies this.

"KBR has not invited any companies to join a consortium of firms regarding potential work in Iraq," said Wendy Hall, public relations manager at Halliburton, KBR's parent company, via e-mail. "Specifically, KBR has not held any discussions with (Rafineria Gdańska) of Poland."

This statement caught RG off guard.

"This seems strange to me," said Marcin Zachowicz, RG's spokesman. "I have information that my CEO has met with a vice president of KBR and that they were talking about it."

After contacting Olechnowicz for some clarity on the issue, Zachowicz said that the chief executive declined to comment.

Zachowicz added that the nature of most talks pertaining to Polish companies' involvement in rebuilding postwar Iraq were still murky.

"Our position is that at this moment we cannot discuss this thing any further as all the talks are in a very early stage," Zachowicz said. He did not refer specifically to any talks with KBR, but rather to interested companies in general.

"We are very interested, especially because we have already worked in Iraq and (in) Basra and other places," he said.

This draws into question when companies here will see any concrete details, as contracts are already being awarded elsewhere.

Michał Gorzyński, economist at the Center for Social and Economic Research (CASE), said that for all involved - the various government ministries and other institutions - there would likely be more difficulties in pursuing business in Iraq today than has usually been the case.

"I've heard that the process is not going as smoothly as it should," Gorzyński said.

He said that the fact that local companies would probably have to go through institutions from other coalition countries would hamstring their operations - and added that the Polish government itself could slow things down.

The ministry of economy, labor and social policy recently discussed the opportunities for Polish companies and workers in a postwar Iraq.

Gorzyński said that by going through government-related institutions to win contracts, time constraints alone would make local companies less competitive. It could take weeks to convene a meeting via the government to decide on a specific project, when there are only a few days available in order to win the business.

But at least for now these concerns are not spoiling some positive news recently announced in the country. At present, more than 100 local companies have been placed on a list prepared for the U.S. Agency for International Development (USAID) of all domestic companies interested in participating in the rebuilding of Iraq. Because of local companies' and employees' experiences working in Iraq prior to the first Persian Gulf War, and given the government's die-hard support for U.S. policy in the region, Polish enterprises are optimistic that they will land at least some ancillary business from the war.

What's more, U.S. President George W. Bush thanked Polish President Aleksander Kwaśniewski for his country's support in Operation Iraqi Freedom in a phone conversation and invited him to a conference, to take place at an undisclosed time and location, on the reconstruction of Iraq. The U.S. only invited three countries: Great Britain, Australia and Poland.

Such news was a boon to construction company Budimex. Warsaw investors rewarded the company for its overt interest in Iraq, as well as its past experience there, by sending its stock price shooting up last week.

Mikołaj Koszutski, press officer at Budimex, said that the news also augurs well for the company's attempt to collect the nearly E1.9 million ($2 million) it is still owed today by the Iraqi government for past work completed in the country. He added that the fact that American forces were now present in Baghdad would probably facilitate Budimex's pursuit to get the capital it lost.

"But (right now) there is no Iraqi government," he said.