BASRA: TWO AMERICAN FIRMS TO HELP BUILD MASSIVE "SPORTS

UNCLAS SECTION 01 OF 02 BASRAH 000041

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EINV PGOV SOCI ELAB KPAO SCUL IZ
SUBJECT: BASRA: TWO AMERICAN FIRMS TO HELP BUILD MASSIVE "SPORTS
CITY" COMPLEX

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1. (U) Summary: According to local officials and media reports,
the Government of Iraq (GOI) has selected two U.S. firms to
design and provide engineering services for a massive new sports
complex in Basra. The site is planned to be completed in
preparation for the Basra-hosted 2013 Gulf Cup, an Olympic-style
soccer competition among Arab Gulf states. U.S.-based 360
Architecture and Newport Global Project Management have formed a
joint venture with Abdullah Al-Jiburi Contracting Company, one
of Iraq's largest contractors, to build the project. The first
phase, to cost around $580 million, includes a 60,000-seat
stadium and 10,000-seat practice facility and four practice
fields. A second phase, to start after the Gulf Cup, calls for
midsize arenas for basketball, volleyball and gymnastics, as
well as athletic housing, restaurants, and a retail space, which
could push the total cost to $1 billion. Iraq's Ministry of
Youth and Sport is administering the project, with
groundbreaking set for mid-July. Despite the GOI's current
budgetary pressure, officials indicate that the deal will go
forward and the money is allocated. If the project moves
forward, it could help unify a soccer loving nation with a
resurgent national team, infuse hundreds of millions of dollars
into the local economy, and provide a substantial amount of much
needed local employment. End summary.

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Preparing to host the 2013 Gulf Coast
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2. (U) A driving force for the project - and one that might
encourage timely completion - is the fact that Basra will host
the 2013 Gulf Cup of Nations (also known as Khaleeji) soccer
tournament. Local officials told PRT EconOff that the stadium
must be completed by around March 2012, to prepare for the
event. Held every two years, the tournament includes the eight
Arab nations in the Persian Gulf (Gulf of Arabia) region: Iraq,
Yemen, Oman, Saudi Arabia, Qatar, Kuwait, UAE and Bahrain.

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A "mini Olympic village"
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3. (SBU) The project's $580 million first phase includes a
60,000-65,000 seat stadium, a smaller 25,000-seat facility, four
5,000-seat soccer fields, athlete housing, and 10,000 parking
spaces. A second phase, to include midsize arenas for
basketball, volleyball and gymnastics; restaurants, a premier
hotel, retail space; and healthcare, media, cultural and
administrative facilities, could push the price tag to $1
billion. According to Ihsan Abdul Jabbar of the Basra
Investment Commission, it will be sort of a "mini Olympic
village," the largest specialized sports city Iraq has ever had,
and the best such sports complex in the Middle East.


4. (SBU) Abdul Jabbar said that the GOI had set aside some 360
acres on a clear site on the outskirts of Basra city, close to
the nearby suburb of Az Zubayr. He also said that a second
tranche of land, of some 240 acres, has been set aside for
future strictly commercial development of hotels, restaurants
and shops. According to former Governor Wa'eli, who was deeply
involved with the tender, the site's location, relatively close
to the Iraq-Kuwait border, will make it easier for Gulf
neighbors to travel to Basra. Local contacts often recall a
not-so-distant past (1970s-1980s) when Basra, Iraq's second
city, was a popular resort and "fun city" not unlike Dubai
today, and express the hope that the city might regain such a
status.

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Bidding process
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5. (U) According to press reports, the idea for such a complex
began in 2007, at the last Gulf Cup, held in Abu Dhabi. The
idea of Basra hosting the 2013 tournament was proposed, and the
idea of Iraq regaining as it were, its position among it Arabian
Gulf neighbors, was positively received, and the proposal was
approved.


6. (SBU) These same sources indicate that some 50 companies
initially expressed interest in competing to design and build
the multiple-venue complex. By early 2009, the GOI had narrowed
the list to seven finalists, from the United States, United
Kingdom, China, France, Kuwait, Russia and Turkey. (According
to Ihsan Jabbar, the Ministry of Youth and Sports pressed
evaluators to choose the Turkish company.) A top-level
committee headed by the Youth and Sports Minister and a group of
Ministry experts, university professors, sports specialists, and
heritage experts made the final decision. 360 Architecture and
Newport Global Project Management (NGPM) formed a joint venture

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with Abdullah Al-Jiburi Contracting Company, Iraq's largest
general contractor. According to Abdul Jabbar, Al-Jiburi is a
billionaire Iraqi national who lives mostly in Jordan and Abu
Dhabi. Construction, to be completed in 32 months, will also
include the rehabilitation of the old Basra stadium. Design and
engineering will be done by 360 Architecture and NGPM,
respectively, and construction by Al-Jiburi and Iraqi workers.
Ihsan Jabbar said that former Governor Wa'eli said that U.S.
companies "do better work" than Turkish or Iraq companies, and
was impressed by 360 Architecture. He was also intrigued by the
notion of reconciling Iraq again with its neighbors through
hosting the Gulf Cup.

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A central government priority
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7. (SBU) Despite the decline in oil revenue and a squeezing of
GOI finances, local officials have told PRT EconOffs that the
deal will go forward and the money is assured. According to
Basra Central Bank branch president Zuhair Ali Akbair and
regional Iraqi Trade Bank president Dawood Sekran Hassan, the
project is "100 percent GOI financed," under a "special Council
of Ministers" budget allocation via the Ministry of Youth and
Sports. Ihsan Jabbar said that this project had been made a
priority by PM Maliki and former Governor Wa'eli.


8. (SBU) The site is also not far from one of Basra's more
notorious slums, Hyanniyah, seen by some as a potential Sadrist
breeding ground for violence. GOI and local officials also
expect that the complex, projected to employ some 1200 people of
all skills levels, will help with the chronic high unemployment,
particularly among the at-risk young male population.

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While the usual questions - security, financing - linger
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9. (SBU) GOI officials have so far expressed unqualified
confidence that the project can and will go forward. While we
hope this is true, concerns linger. In the current relatively
low oil price climate and squeezed GOI finances, it is fair to
ask just how much of the $580 million to one billion dollar
price tag the GOI will be able to come up with. (According to
press reports, the joint venture contract terms call for a 20
percent upfront from the Ministry of Youth and Sports.) Another
critical factor determining the projects' success will be the
security situation.

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Comment
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10. (SBU) If the project goes forward, it could be one more
small but important sign of progress. Aside from infusing
hundreds of millions of dollars into the local economy, the
project could also employ just the kind of people -- poor, young
and male -- that need to be productively employed and kept out
of trouble. More broadly, "Sports City" might help Iraq remain
a sense of "normalcy" among its neighbors. Perhaps most
importantly however, soccer is one of the few things the unite
Iraqis - Shia, Sunni, Kurd or Christian, and form north to south.
NALAND