Identifier
Created
Classification
Origin
06BAGHDAD2141
2006-06-22 14:31:00
UNCLASSIFIED
Embassy Baghdad
Cable title:  

INITIAL MEETING WITH THE MINISTER OF HOUSING AND

Tags:  ECON EIND ELTN EPET IZ 
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VZCZCXYZ0024
PP RUEHWEB

DE RUEHGB #2141/01 1731431
ZNR UUUUU ZZH
P 221431Z JUN 06
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 5245
RULSDMK/DEPT OF TRANSPORTATION WASHDC PRIORITY
UNCLAS BAGHDAD 002141 

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON EIND ELTN EPET IZ
SUBJECT: INITIAL MEETING WITH THE MINISTER OF HOUSING AND
CONSTRUCTION


UNCLAS BAGHDAD 002141

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON EIND ELTN EPET IZ
SUBJECT: INITIAL MEETING WITH THE MINISTER OF HOUSING AND
CONSTRUCTION



1. (SBU) SUMMARY: In a June 20 introductory meeting with
Deputy EconCouns, IRMO Senior Consultant for Transportation
and the Gulf Regional Division (GRD) Commander, the new
Minister of Housing and Construction (MOCH) Bayan Dazai
expressed her gratitude for U.S. assistance in the
reconstruction of Iraq, but lamented there is still much work
to be done. She was receptive to working closely with the
USG on housing, housing finance, privatization, and
anti-corruption, as well as construction projects and
capacity development, within her Ministry. END SUMMARY

--------------
Much Work Still to be Done
--------------


2. (SBU) The Minister recounted her shock, when she arrived
from Irbil to assume her new position, at the lack of
development outside of the Kurdish Region. As she stated
&Baghdad is still living in the seventeenth century.8
Minister Dazai repeated several times that &so much work has
to be done.8


3. (SBU) The Minister asked about the progress status of the
Project Partnership Agreement contracts. Of the $75M for the
five bridge and three road USG contracts under this program,
the MOCH has to front typically 5-10 percent of the
individual project costs to cover mobilization and initial
construction, though the USG reimbursed the MOCH up to a set
amount. In a meeting on May 12, the MOCH issued warnings to
contractors onseveral of these projects to fulfill their
contractual obligations. The GRD Commander mentioned that the
Baghdad-Kirkuk 2nd Carriageway (North) project was only
two-four percent complete due to previous issues with the
contractor. They included currency conversion problems,
current security threats, and the lack of supply, low
quality, and price increases of bitumen and fuel that caused
the fixed price contract to become unprofitable. We note that
the supply problem is caused by limited production capacity,
maintenance, infrastructure (pipeline) sabotage. The supply
problem experienced by contractors on these USG-funded
efforts is compounded by the fact that the State Commission
for Roads and Bridges (SCRB) did not place these projects on
their master plan which provides projects priority

procurement of materials at subsidized prices. We have been
working with the SCRB, MOCH, and Ministry of Oil to resolve
this issue.


4. (SBU) The Minister affirmed the poor quality of bitumen
produced in Iraq and stated she wants to import better
quality bitumen. The GRD Commander asked Minister Dazai to
tell the Minister of Oil how important raising the standards
of crude oil production is to the economic development of
Iraq (bitumen is a often used interchangeably with
&asphalt8 and &tar8 and is made from the residue left
when refining crude oil.)


5. (U) The Minister also pointed out that in her previous
position as Deputy MOCH in the Kurdish Regional Government,
she was able to sign contracts to import anything her
Ministry needed, whereas in the Central Government of Iraq,
she must obtain approval.


6. (SBU) The GRD Commander noted the USG programs were never
designed to &finish everything8, but to start
reconstruction projects, and we have made significant
progress in a lot of areas. The Commander invited the
Minister to the ribbon cutting ceremony of the Afras Water
Treatment plant in Irbil in July. The Minister responded
positively regarding the ceremony, but commented on the poor
water quality in Baghdad compared to the Kurdish region.

-------------- --
Minister Will be a Champion for Economic Reform
-------------- --


7. (SBU) We told the Minister we work closely with Deputy
Prime Minister Barham Salih, the World Bank, International
Monetary Fund, United Nations and foreign investors to assist
Iraq with making necessary fundamental economic reforms. We
mentioned the Econ Counselor spearheads the Embassy,s
anti-corruption efforts and asked to schedule a follow-up
meeting to discuss anti-corruption, privatization, housing
and housing finance, and other policy reform priorities. The
Minister responded we were welcome to meet again at any time.
The Minister also positively responded to arranging follow-up
meetings to discuss project progress and available USG
assistance.


8. (SBU) As Embassy representatives have done in all
introductory meetings with new Ministers, the IRMO Senior
Consultant for Transportation presented an Embassy-produced
Ministerial Transition briefing book to the Minister

highlighting USG assistance in strategic planning, management
training, technical assistance, public outreach, and
identifying budget requirements.

--------------
Comment
--------------


9. (SBU) The MOCH Minister told EconOffs in a later
conversation that she never wanted to be the GOI Minister of
Construction and Housing, but that she was selected by
Barzani. The Minister encourages cooperation with the USG and
seems to be a champion for promoting private sector
development. We have requested for the Minister,s CV; once
received we will forward to the Department.
SPECKHARD