IRAQ RECONSTRUCTION: GOI MAY SWEETEN TELECOM

S E C R E T ROME 005344

SIPDIS


E.O. 12958: DECL: 11/24/2013
TAGS: ECIN ECON ECPS IS IT IZ PGOV PREL IRAQI FREEDOM
SUBJECT: IRAQ RECONSTRUCTION: GOI MAY SWEETEN TELECOM
ITALIA PLAN AS MADRID DONATION

REF: A. ROME 5010

B. ROME 4974

CLASSIFIED BY: ECONOMIC MINISTER-COUNSELOR SCOTT F. KILNER FOR REASONS
1.5 (B) AND (D)


1. (C) SUMMARY: TELECOM ITALIA OFFICIALS, EAGER FOR ANY
PROGRESS ON THEIR PROPOSAL TO CONNECT IRAQ TO THE MEDNAUTILUS
FIBER OPTIC NETWORK (SEE REF A),TOLD ECONOFF ON NOVEMBER 21
THAT THE GOI IS SO COMMITTED TO THE $15 MILLION PROJECT THAT
IT MAY INCLUDE THE PROPOSAL IN THE 200 MILLION EURO DONATION
PACKAGE ANNOUNCED BY FM FRATTINI AT THE OCTOBER MADRID DONORS
CONFERENCE. THE ITALIAN MFA IS GATHERING PROJECT PROPOSALS
TO DETERMINE WHAT THE PACKAGE WILL INCLUDE, AND MEDNAUTILUS'
CHAIRMAN SAID AN ANNOUNCEMENT OF THE RESULTS IS EXPECTED
WITHIN THE NEXT TWO TO THREE WEEKS. END SUMMARY.


2. (C) ECONOFF'S CONVERSATION WITH MEDNAUTILUS CHAIRMAN
FRANCESCO NANOTTI ON NOVEMBER 21 REVEALED THE HIGH STRATEGIC
VALUE THE GOI PLACES ON THE TELECOM ITALIA PROPOSAL FOR IRAQ.
NANOTTI, WHO HAD PHONED EARLIER IN THE WEEK TO INQUIRE IF
EMBASSY HAD RECEIVED ANY WASHINGTON OR BAGHDAD REACTION TO
REFTEL, SAID THAT MFA DIRECTOR OF MEDITERRANEAN AND MIDDLE
EASTERN AFFAIRS RICARDO SESSA WAS "VERY LIKELY" TO INCLUDE
THE PROPOSAL IN THE LIST OF PROJECTS HE WOULD SUBMIT TO FM
FRATTINI FOR A FINAL DECISION POSSIBLY AS EARLY AS THIS WEEK.



3. (C) NANOTTI SAID THAT THE GOI SEES THE TI PROJECT AS A
HUGE STRATEGIC OPPORTUNITY FOR ITALY, PART OF THE BROADER
ITALIAN EFFORT TO ASSUME A LARGER ROLE IN THE IRAQ
RECONSTRUCTION EFFORT AND TO RECEIVE GREATER RECOGNITION FOR
SAME (REF B). NANOTTI SAID THAT THE GOI IS AWARE OF THE
SEISMIC EFFECT THE PROPOSED ISRAEL CABLE ROUTING HAS ON THE
IRAQI PSYCHE, BUT HE HOPES THAT BY COVERING THE $15 MILLION
COST OF THE PROJECT, THE GOI WILL "MAKE THEM AN OFFER THEY
CAN'T REFUSE," GIVEN THE SIGNIFICANT AND IMMEDIATE IMPACT IT
WOULD HAVE ON THE IRAQI TELECOM INFRASTRUCTURE.


4. (S) COMMENT: GOI INCLUSION OF THE TI PROPOSAL IN ITS
MADRID DONATIONS PACKAGE WOULD CONFIRM WHAT WE ARE HEARING
INDIRECTLY ABOUT HOW CONVINCED THE GOI IS OF THE PROJECT'S
VALUE. IT WOULD ALSO REINFORCE HOW INTENT THE ITALIANS ARE
ON CREATING A LASTING ROLE FOR THEMSELVES IN THE FUTURE OF
IRAQ (REF B). IN ESSENCE, ITALY WOULD BE OFFERING TO CONNECT
IRAQ TO TI'S GLOBAL FIBER OPTIC NETWORK FREE OF CHARGE.
BECAUSE THE ISRAEL ROUTE REMAINS UNCHANGED, HOWEVER, THE
PROJECT STILL MAY NOT PASS MUSTER POLITICALLY IN IRAQ. END
COMMENT.
SEMBLER

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2003ROME05344 - Classification: SECRET