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Indian firms
fight back for $10bn Iraq 'prize'
By
Siddharth Srivastava
NEW DELHI:
The United States' barring of Indian companies from
bidding for a primary share of the US$18.6 billion in
Iraq reconstruction contracts has derailed hectic
lobbying to garner 
business in the war-torn country since Saddam
Hussein was deposed.
The US move could create an
aggressive pressure group in India - and in Washington -
that will favor deployment of Indian soldiers in Iraq to
help the beleaguered US troops, as well as bring about a
rethink by the Pentagon over the business deals.
Other countries blocked from bidding for main
contracts - they can still be handed sub-contract work -
include France, Germany, Russia and Canada, all of whom
have opposed the US-led war against Iraq and refused to
send troops to enforce the US occupation there. They
have also called for the United Nations to play a more
prominent role in restoring Iraqi sovereignty. After
much dithering, India only recently said that it would
not send troops to Iraq.
Apart from US, British
and Iraqi companies, firms from 60 other nations
described by the Pentagon as "coalition partners" and
"force contributing nations" have been deemed "eligible
to compete for contracts funded with US appropriated
funds for Iraq reconstruction". Though
troop-contributing nations like Spain, Poland, Korea and
Japan are on the list, so are Saudi Arabia and the tiny
Pacific nations of Micronesia and Tonga, which have not
sent troops.
In India, estimates put the
business reconstruction opportunities in Iraq at more
than $100 billion. The past six to eight months have
seen Indian business and government delegations visit
the US and Iraq to lobby for work, as well as to make
first-hand assessments of the extent of possible Indian
involvement, and to see the security situation and
establish crucial contacts.
The Indian business
lobby that stands to gain through the Iraq-US
dispensation is quite powerful as India and Iraq have
been traditional business partners for a long time. Some
estimates put the value of new contracts that India
hopes to garner at over $10 billion, mainly in the
fields of oil, power, telecommunications, construction
and railways.
That this lobby is desperate can
be gauged from the fact that several Indo-Iraq contracts
that were being negotiated over the past year,
particularly in the oil and railway sectors, had to be
put on hold after the fall of Saddam. Petroleum Minister
Ram Naik visited Baghdad in July last year to sign
agreements on oil exploration and related business. The
Oil and Natural Gas Commission (ONGC) was to open an
office in Baghdad and was waiting for the green light
from its board to invest approximately $63 million in
Iraq.
The then Iraqi oil minister, Amir Muhammed
Rasheed, was considering granting ONGC oil concession in
southern Iraq. Bilateral trade between India and Iraq
under the UN's oil-for-food program had reached $1
billion. More contracts in railways, oil and gas, health
and industry, in addition to technical cooperation, were
being negotiated. Under the agreement signed during
Naik's visit, India was to export to Iraq medicine,
wheat, rice, railway equipment and turbines for power
generation. A trilateral contract between India, Iraq
and Algeria was being finalized for exploring and
drilling the Tuba Oil Field between Zubair and Rumaila
in the south.
Once Saddam fell, a careful game
plan was drawn up in terms of which a double hit of
government and business leaders visited the US, UN
offices and Kuwait to present India 's expertise and its
experience in doing business in the Gulf region.
Principal Secretary Brajesh Mishra, who works
closely with Indian Prime Minister Atal Bihari Vajpayee,
visited New York and Washington and met a wide spectrum
of the leadership, with Iraq on top of the agenda. India
's ambassador to Kuwait, S P Singh, has been meeting
with US diplomatic and military officials to present the
Indian case. Earlier this year, a high-level official in
the foreign ministry, secretary R M Abhyankar, visited
Jordan, Syria and Turkey, as well as leading a joint
delegation of government and industry to the US.
Before the saga of Delhi's dithering over
sending troops unfolded, there was a positive response.
Kuwaiti and American officials asked the Indian embassy
in Kuwait for a list of Indian companies with experience
of doing business in the Gulf region and which could
execute large orders. Representatives of 39 Indian
companies, including Larsen & Toubro, NBCC, Rites,
Gamon India , Essar and Bharat Earth Movers, also
visited Washington to ensure participation in the Iraq
reconstruction program.
However, with India
finally turning down the US request for troops in Iraq,
and Washington deciding to play hardball, diplomatic
circles in Delhi are rife with debate over whether there
should be a rethink on the question of sending of
troops. The last time the US asked India for troops was
when Vajpayee was in New York in September for the UN
General Assembly session, when he had lunch with
President George W Bush. At that time the Vajpayee
government cited ongoing tension with Pakistan as a
reason for not being able to spare troops. There were
several accompanying reports of the US trying to win
India's support by offering to lift sanctions on
dual-use technology components, as well as reining in
Pakistan from promoting cross-border terrorism, which
India vehemently blames on its neighbor.
It was
no surprise, then, that following the Bush-Vajpayee
meeting, the US applied considerable pressure on
Pakistan, which subsequently unilaterally announced a
ceasefire along the Line of Control that separates the
disputed area of Kashmir between India and Pakistan, and
the Siachen glacier, as well as several other
confidence-building measures, including the removal of
an overflight ban on Indian aircraft and the
re-establishment of cricket contacts.
Thus, the
US is once again looking at India with a questioning
eye. And though foreign ministry officials refuse to go
on record and deny any rethink on the issue of sending
troops to Iraq, diplomatic circles are awash with fresh
talk of troop deployment.
Officials also say
that another reason for a change in views is that while
Vajpayee's role was decisive in rebuffing the US request
for troops earlier this year, the opposition to
deployment put up by Kanwal Sibal, who retired as
foreign secretary at the end of last month, was also
crucial. Now that Sibal has left, it is possible someone
may try and push the issue again.
Indeed, there
are indications that such a move is already under way. A
high-level Indian delegation will visit Iraq later this
month to make an on-the-spot assessment of the
prevailing security situation. Though the official
reason is to study whether New Delhi should begin
implementing its offers of political and humanitarian
assistance to that country, officials here say that an
eagle eye will also be kept on the ground-level
situation, and the kind of risks that Indian troops
would likely face if deployed.
The Indian
delegation, to be headed again by Abhyankar, is likely
to be in Iraq from December 17 to 21. ''The idea is to
establish close contacts with the Iraqi Governing
Council," foreign ministry officials say. But
Abhyankar's main task, given the increasing attacks on
foreign troops, diplomats and aid workers in Iraq, is to
evaluate how safe the situation is for the growing
number of Indians working there, and, more importantly,
to assess the kind of reception Indian troops could
expect should they ever be sent there as peacekeepers.
Observers, however, also say that the final
decision on troop deployment could still rest with what
the United Nations does in Iraq and whether its
humanitarian agencies plan to return there soon. There
are reports that secretary general Kofi Annan is
preparing a major report on the UN's assessment, and a
good part of India 's response could depend on what he
has to say. Annan has criticized the latest US decision
to bar countries like France and Germany, which opposed
the war, from the next round of reconstruction contracts
in Iraq. He has also ruled out any immediate
redeployment of non-Iraqi staff for humanitarian work.
Yet, in the final analysis, the only succor for
the increasingly cornered US troops in Iraq could come
from the UN.
Siddharth Srivastava is a
New Delhi-based journalist.
(Copyright 2003
Asia Times Online Ltd. All rights reserved. Please
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