Arabian Business Weekly Update 20th July 2004

The reconstruction of Iraq has already run into trouble, with controversy over the allocation of mobile licenses.

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By  Anil Bhoyrul Published  July 19, 2004

Editorial Leader|~||~||~|

Dialing up trouble

Nearly a month after the official handover, the bullets are still flying in Iraq. But the new Iraqi regime is quite rightly just as focused on rebuilding a war torn nation, practically from scratch. One of its biggest and most urgent concerns is over the future of any Iraqi mobile phone network. A $500 million contract to provide mobile operations in Iraq’s central region has been awarded to Orascom. This is an absolutely vital contract, essential to bring the country into the fast moving world of the Internet and wireless communications. There is of course one slight problem. Orascom’s Iraqi telecommunication division is partly owned by none other than tycoon Nadhmi Auchi, a man with a colourful past. Last year he received a 15 month suspended jail sentence from a French court for receiving illegal commissions to help Elf build an oil refinery in Spain. The French bank BNP Paribas, that is also partly owned by Auchi, was selected by Saddam Hussein to run the Oil for Food program. Auchi is known to have had some ties with the former dictator. If that didn’t raise alarm bells, then maybe a memorandum dated June 14 2004, from the U.S deputy undersecretary for defence John Shaw, should have done. It says Orascom is under investigation for alleged “fraud on the Ministry of Communications.” The memo claims that illegal payments were made by Auchi to Iraqi officials, in order to secure the work. None of this proves any illegal activity has taken place. It may never have. But if the new Iraqi regime is to secure the confidence of the investment community, it must cut all ties with the past. And that includes putting its mobile phone contracts back out to tender – immediately. ||**||

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