So far nine contracts for the reconstruction of Iraq worth $2,400 million have been awarded by the USAID to American companies including Bechtel, Halliburton, Motorola, MCI, Research Triangle Institute, etc.
Bechtel's $680 million contract gives the American company the responsibility for the design, rehabilitation, upgrading and reconstruction of Iraq's infrastructure including one seaport, five airports, electric power plants, road networks, rail systems, municipal water and sanitation services, schools and health facilities, select government building and initial satellite communications system.
USAID has allowed the major American companies to subcontract up to half the value of their contracts to non-US firms, with an eye to benefit from the excess capacity available in the region. Furthermore, federal regulations in the US prohibit supplying materials from American companies if the cost is more than 6 percent higher than can be obtained locally for the project.
What will happen in effect is that American companies like Bechtel and Halliburton will manage the projects, while companies from Jordan, Kuwait, Saudi Arabia and UAE among others in the region will provide material supplies and work on major subcontracts. Language, communications, proximity to Iraq, ability to provide quality products and services at competitive prices and knowledge of the local Iraqi market will boost the competitive advantage of Arab contractors and suppliers.
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