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- Tuesday,10-09-2024,PM 3:15
- Karar Al-Asadi
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Iraq's ports have been transformed from an economic resource for the state into a gateway to corruption and a source of funding for private entities and parties involved in controlling its resources, which have turned it into an inheritance handed down from fathers to sons and from one official to another.
As the Grand Faw Port approaches the opening of its berths to ships and steamers next year, an American court issued a ruling yesterday, Monday, against the Iraqi government and the Iraqi Ports Company to pay $120 million to the Cypriot company Archirodon, which is responsible for constructing the breakwater in the Faw Port.
It is noteworthy that the project to establish the container terminal for the Grand Faw Port, which is one of the five projects of the project, includes the construction of five giant docks for unloading ships with a length of 1,750 meters, and the construction of a container yard with a length of 2,000 meters.
This came after the Cypriot company Archirodon was awarded a $265 million contract to build a breakwater at the Grand Faw Port by the General Company for Ports of Iraq in 2012.
The company was unable to recruit enough workers as a result of ISIS launching a major attack on Iraq.
“The foreign countries from which Archirodon recruits its workforce have discouraged or even prevented their citizens from traveling to Iraq,” said US Judge James Boasberg.
“The construction of the breakwater faced unexpected obstacles, including the company not hiring enough workers due to the massive ISIS offensive in Iraq, some foreign countries from which ArchiProdon had recruited workers prevented them from traveling to Iraq, and even banned them from traveling altogether, and the Iraqi government feared that Basra residents would oppose the company’s trucks and heavy vehicles on the Basra-Faw road, which could lead to protests, and the soil conditions mentioned by the General Company for Iraqi Ports in the tender were incorrect, which led to the construction not being completed on time,” Boasberg added, ruling in favor of ArchiProdon.
As a result, the General Company for Ports of Iraq imposed a fine of approximately $24 million on Archirodon, while Archirodon responded in 2016 by requesting arbitration from the International Chamber of Commerce to recover the additional costs it incurred due to construction delays.
In 2019, the International Chamber of Commerce ruled in favor of Archirodon, and the company then went to court in the United States to enforce the ruling against the General Company for Ports of Iraq.
The action was taken under the New York Convention, an international treaty signed by more than 150 countries that allows for the enforcement of decisions made under arbitration.
The Iraqi side filed a request to appeal the decision based on the principle of sovereign immunity, a legal principle that states cannot be sued.
The Iraqi side stated at the time that “the General Company for Iraqi Ports acted as a separate entity in the arbitration and not as part of the Iraqi state, which means that the government should not be responsible for the amount awarded in favor of Archirodon.”
The judge rejected this claim and said that “the General Company for Iraqi Ports signed the arbitration agreement as an agent for the Ministry of Transport, which is an integral part of Iraq.”
In rejecting the Iraqis' request, the judge said they "have not presented any other argument to explain the four-month and now eight-month delay in paying the amount."
On September 5, the Ministry of Transport announced that the progress of the Faw Port project had reached advanced stages, while specialists in economics and maritime border demarcation revealed the most prominent challenges facing the launch of one of the most important projects in Iraq’s modern history, namely corruption, mismanagement, and potential security challenges due to “parties” who want to exploit it to gain profits.
“Corruption is the biggest obstacle facing the port of Faw, so there must be efficient management, and unfortunately Iraq lacks it so far,” Jamal al-Halbousi, an expert in maritime border demarcation, said in a previous statement to Al-Alam Al-Jadeed newspaper. “If the same administrative work in other Basra ports, such as Khor al-Zubair and others, is reflected in the port of Faw, it will be a disaster for the new port. However, if it is managed by expert companies, the port is a historic opportunity for Iraq to revive the economy.”
He added, "The port will start operating with five docks, and its success in operation will give Iraq an opportunity to develop and increase the docks because Umm Qasr Port operates with 29 docks, and what is planned for the Grand Faw Port is to contain a greater number of docks than what is present in Umm Qasr Port."
The Faw Port was supposed to have 99 berths and be the largest port in West Asia, surpassing the Jebel Ali Port in the United Arab Emirates. The port adds strategic importance to Iraq and generates huge financial returns through the transport of goods and oil products faster than before.
Fourteen years have passed since the foundation stone was laid for the construction of this port, but political conflicts and the intersection of internal and external interests, in addition to corruption factors, prevented its completion, which prompted the “Popular Movement for the Belt and Road” last April to demonstrate in the vicinity of the Green Zone, to expose the files of financial and administrative corruption in the Grand Faw Port.
The Greater Faw Project represents an important economic and political goal, given its high financial cost and political and social importance, as many political actors and armed groups seek to control or undermine it to achieve personal gains and political goals.
It is worth noting that the sea time for ships loaded with goods from the Chinese port of Shanghai to the Dutch port of Rotterdam takes about 33 days, while it will take only 15 days when the goods move from Shanghai to the Pakistani port of Gwadar and then to the Grand Faw port, and from there via the Iraqi dry canal to the Mediterranean ports in Turkey, and from there to the Dutch port of Rotterdam, which means reducing the travel time by more than 50 percent.
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