Call for bids on $2.5bn Iraq airport

The new airport, which is expected to manage 20 million passengers a year, will ease the pressure on Baghdad International Airport, above. Mohammed Ameen / Reuters

UAE contractors have been invited to submit bids for rights to construct a US$2.5 billion airport in Iraq, as religious tourism lifts visitor numbers.

The airport will be "strategically located within a 40 kilometre vicinity of the provinces of Karbala, Najaf and Hilla. We chose this location because we are seeing a surge in tourists coming here … and that's putting a lot of pressure on the airports of Baghdad and Najaf," said Nasser Hussein, the director general of Iraq's civil aviation authority in Baghdad.

Contractors being considered included heavyweights from the United States, Germany, Italy, Turkey and the UAE, said Mr Hussein, but he declined to name the companies that had been shortlisted.

The UAE's Arabtec Holding, currently working with Tav on Abu Dhabi's Midfield Terminal, is understood to be among the companies that are planning to bid for the contract.

"It can be a winning ticket if Arabtec teams up with an experienced contractor in airports such as Tav," said Fathi Ben Grira, the chief executive at Menacorp in Abu Dhabi. "You'd have the general experience of Arabtec, backed by the financial strength of Abu Dhabi plus the specific track record of Tav in building airports. Separately, Tav would have an upper hand given the strong commercial trade ties between Iraq and Turkey."

Turkey's bilateral trade volume with Iraq was $12bn in 2011, making it Iraq's biggest trading partner.

The new airport is expected to manage 20 million passengers a year, making it the country's biggest and serving as a hub for the country's expanding national fleet.

Iraqi Airways has ordered eight aircraft from Airbus and 39 others from Boeing amid plans to own and operate 65 planes by 2016, triple the current figure.

"God willing, the first phase of the airport project will begin in October, which includes a runway and a terminal. The second phase will include another runway and terminal," Mr Hussein said. "We ideally would like some of the project to be funded via private investment, but if we don't get the target we need, the Iraqi civil aviation authority is ready to seek the amount - what we expect to cost about $2.5bn - from the [government]."

Iraqi Airways, founded in 1945, is among the oldest airlines in the region but until recently had no planes of its own after it liquidated its assets and attempted to dissolve the entity to avoid paying hundreds of millions of dollars of debt owed to Kuwait as reparation for the theft of spare parts and engines during the 1991 Gulf War.

Iraq in March last year reached a US$500m debt deal to resolve the two-decades long dispute with Kuwait, paving the way for the airline to return to normal business.

"We want to expand our fleet and operate routes to Europe, Malaysia and India. We want to operate just like any other regional airline," Mr Hussein said at the time.