When Taha Abdulsalam left work yesterday, he never expected that it would take him four hours to arrive at his Baghdad home. It wasn't the regular traffic jams incurred by security checkpoints that caused the delay, but major flooding caused by days of continuous heavy rainfall.
"The rain is a good omen, but having the whole country stop for one day because of the floods is a grim reality of how bad the infrastructure is today," said the chief executive of the Iraq Stock Exchange. "In most places around the world, continuous rain wouldn't lead to a disruption of businesses."
Iraqi authorities declared yesterday a national holiday due to bad weather and heavy rain. A disruption to the electricity grid and the failure of emergency generators as a result of damage to cables underground left many businesses and individuals without power yesterday. Iraq's stock market cancelled its trading session, meant to be its last for the year. Trading will resume on January 7.
After decades of war, an infrastructure law envisaged in 2009 remains the subject of wrangling among legislators in parliament. The draft bill, which consists of a US$40 billion (Dh146.92bn) budget to help to build roads, water projects, schools and hospitals, is yet to be ratified.
According to the proposed law, foreign companies would take on projects commissioned by the government on credit and would be paid over a period of several years.
Parliament postponed the vote in September, amid concern from legislators that the budget would be a heavy burden for Iraq and that would put the country in further debt. The ratification into law would be a boon for regional contractors that have recently sowed roots in Iraq, largely considered a frontier market.
"We are very interested in Iraq's infrastructure prospects," said Khaldoun Tabari, the chief executive at Drake & Scull International, Dubai's biggest contractor.
DSI, which has offices in Baghdad and Basra, has been bidding for projects involved in infrastructure, water treatment and oil and gas.
In September, it won an Dh86 million contract to build a waste-water-treatment plant in Kerbala and a Dh1.314bn contract to install a pipeline at the Zubair oilfield in Basra.
Despite the entry of companies like DSI, foreign companies are yet to rush into the country's construction sector, amid risk in both the legislation and security side.
"There is a lot of bureaucracy and legislation that remains to be put in Iraq, with Kurdistan witnessing a lot of development on that front, while other parts of the country seem to fall behind," said an analyst who declined to be named.
"It really comes down to how much risk these companies are willing to take. When a contractor comes in they have to have the financial infrastructure, raise financing for projects and make sure the client will give you the money on time. For multinational companies, there must be due diligence made before getting into a market like Iraq."
Iraq has had to restructure billions worth of public debt taken out by Saddam Hussein. Members of the Paris Club, an informal group of financial officials, and non Paris Club members agreed to debt relief in 2004.
Iraq's cabinet has earmarked a $115bn budget for next year. The national budget for this year was $100.5bn.
