Iraqi Airways secretly privatised

A report from the Open Society Institute (OSI) suggests that 75% of Iraq's air sector assets have been secretly sold to a single family.

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By  Neil Denslow Published  February 17, 2004

Despite claims from the Coalition Provisional Authority (CPA) that Iraq’s air industry will be returned to the people of Iraq, a report from the Open Society Institute (OSI) suggests that 75% of the nation’s air sector assets have been sold to a single family. OSI, which is funded by billionaire George Soros, suggests that the deal is one of a number of suspect transactions occurring within the chaos of Iraq at present. “This does not bode well for the reconstruction of Iraq’s economy,” said Isam al Khafaji, director of OSI’s Iraq Revenue Watch project. “The CPA should be making sure that public industries are protected.” The group’s report, “Controlling Iraq’s Skies,” suggests that Iraq is likely to follow a similar path to Russia, where rapid privatisation led to the emergence of a class of oligarchs who bought up state assets at below market prices. According to OSI, plans are being made to privatise Iraqi Airways, the country’s flag carrier, without any public bidding. It’s Iraq Revenue Watch project has obtained a copy of a contract to establish a joint venture named al Iraqiyya Air, which was signed by the Iraqi Ministry of Transport and three members of the Khawwam al Abdul Abbas family. Citing local news reports, OSI says that this family had close ties with Saddam Hussein’s regime and that they were oil smugglers under the UN sanctions. The signed contract requires the Ministry of Transport to surrender Iraqi Airways planes, agreements, and other assets, but it is not clear what the other signatories are contributing to the deal. As such, the OSI report calls for the contract to be frozen and for the launch of an investigation by the International Advisory and Monitoring Board, as well as by the CPA Inspector General. It also argues that the CPA should compensate Iraqi Airways for damage to its facilities committed by occupying forces and pay for the use of its facilities.

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