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Tuesday, 23 June 2015

Foreign interest in Iraq’s Port Faw project may push back tender deadline

Authorities in Iraq may extend the deadline for bids to develop the Port of Faw in the south of the country following strong interest from foreign firms. The port is slated to become the third largest commercial port in the world once complete.

“The deadline for receiving applications expires at the end of June but it may be extended by the Transport Ministry to allow more firms to apply," Omran Radi, director general of the state-owned General company for ports of Iraq, told local news agency Al-Sumaria

Despite potential delays to the tender deadline the Iraqi cabinet has reportedly approved certain infrastructure contracts already on a pay-on-completion basis for contractors.

"We have received a number of applications from foreign companies to execute the Faw Project on an investment basis,” Radi said, adding that authorities received bids from from China, Greece and Spain, and was negotiating with firms on a "formula for investment in the project."

The Port of Faw project is expected to cost around $6.5 billion in total with a first phase due to be completed in 2018.  The initial phase of work will increase capacity to 2 million TEU as part of a strategy to ultimately reach capacity of 20 million TEUs and handling capacity of around 99 million tonnes per year.

The investment will be used to construct a 39km container quay and 2km of berths along with a container warehouse and hinterland covering more than one million square metres.

The port project has suffered repeated setbacks since an initial call for tender was announced as long ago as 2012. Falling oil prices have impacted government revenues limiting the ability to support the project and ongoing security concerns have caused hesitancy from international investors.

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