DHI QAR PRT: PIC IMPROVES BUT NOT QUITE THERE

UNCLAS SECTION 01 OF 02 BAGHDAD 000184

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ETRD EFIN EINV IZ
SUBJECT: DHI QAR PRT: PIC IMPROVES BUT NOT QUITE THERE

SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY.

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Summary
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1. (U) Under charismatic leadership, the Dhi Qar Provincial
Investment Commission (PIC) scores some victories but lacks the
strategic planning, organization and professionalism to reach its
lofty goals. END SUMMARY.

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How Not to Build an Organization
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2. (SBU) Dr. Ismail Radhi serves as the PIC Chairman in Dhi Qar. He
has close ties to Governor Aziz Alwan (ISCI) and most likely holds a
second paid position as an advisor in the Governorate. While this
may be contrary to the National Investment Law, Dr. Ismail remains
an excellent and motivated contact of the PRT. He welcomes
engagements and has noted the shortcomings of the PIC and the
business community in Dhi Qar. In particular he has asked for
technical training on project management, investment, planning, and
organization.


3. (SBU) In our early engagements with the PIC it was clear that
there was an initial euphoria at the amount of resources allocated
for operations. The PIC immediately hired 90 staff members. Dr.
Ismail acknowledged that once the staff members were on board, then
they began to think about how the PIC should be organized based on
the skill sets their employees brought to the table. The result is a
disjointed organization that has managed to produce some basic
marketing materials with the help of the National Investment
Commission (NIC) but otherwise remains rudderless.

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Success Stories?
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4. (SBU) The Dhi Qar PIC has scored some successes such as
agreements on housing developments. More frequently though details
about agreements are usually scarce and results exaggerated. One
such example was the alleged agreement signed between the Dhi Qar
PIC and the Turkish investment group OSTIM on December 31, 2008. The
media picked up the story as an unmitigated success that would bring
in 8 billion USD over five years to develop an industrial city just
south of Nasiriyah. From subsequent discussions with the PIC
Chairman it appears that what was signed was a memorandum of
understanding on protocols regarding how OSTIM would engage with the
PIC in the future. While this is a positive development, it is only
the beginning, not the crowning achievement as originally
advertised.


5. (SBU) What was advertised as another success story was an
Iranian investment to build a cement factory in western Dhi Qar.
Originally thought to be a done deal, the investor has failed to
obtain the required credit certificates and the deal remains on
indefinite hold.

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Oil Coordination
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5. (SBU) The PIC clearly has an interest in playing a role in the
development of Dhi QarQs oil sector. They presented the PRT with
flow charts on investment opportunities in refineries and oil field
exploitation. While the flow charts showed a high level of
coordination between the various line ministries to include oil,
finance and planning, the PIC Chairman was unaware of developments
such as the Front End Engineering and Design (FEED) award recently
made by the Ministry of Oil for a 300,000 bpd refinery in Nasiriyah.
The Chairman also did not mention the recent bids from Italy's Eni
SpA, Spain's Repsol and Japan's Nippon Oil for an oil services
contract in Dhi Qar. This leads the PRT to believe that the PIC is
largely out of the loop with regards to decisions being made by the
Ministry of Oil in Baghdad.

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Pipe Dreams
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6. (SBU) The Provincial Government in Dhi Qar repeats three major
Q6. (SBU) The Provincial Government in Dhi Qar repeats three major
ideas each involving large sums of investment. These are not new
ideas and have been shopped around to investors and Coalition Forces
for years. Unfortunately the Provincial Government has yet to come
up with firm proposals or market research on any of them. These
ideas include a Civilian Air Terminal at Tallil Air Base, a
Touristic City of Ur and an Industrial City 12 km south of
Nasiriyah. The air terminal proposal has allegedly received some
funding from the central government to conduct an initial viability
study, but PRT has received no updates. The PIC has hosted

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international investors with regard to a touristic city based on the
archeological sites at Ur. Similar to ideas bubbling in other
provinces this would include five-star hotels and massive
infrastructure development. Again, no real studies or plans have
been conducted. The third big dream is the industrial city mentioned
above. The big-ideas are there; the means to get the ideas on paper
in a way that can be implemented is not.

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Comment
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9. (SBU) The PIC revolves around Dr. Ismail as the Chairman, who
acts as directed by Governor Aziz. Contacts at every other level
with the PIC have proven fruitless. While the PIC has made some
progress, thanks to the NIC and Iraq-wide training initiatives, they
have requested more targeted efforts as they recognize they are not
at the same level, nor do they have the same investment
opportunities, as Karbala or Najaf. PRT welcomes the MND-C funded
initiative to bring an expert consultant to Dhi Qar with a Bilingual
Bicultural Advisor to work directly with the PIC. The expert will
need daily access to the PIC, a strong familiarity with the National
Investment Law and not be over-encumbered by security requirements.
END COMMENT.

CROCKER