RP to gain from 14 US firms awarded contracts to rebuild Iraq

The Philippines stands to get a significant amount of subcontracts from 14 American firms selected by Washington to get $1.7 billion in rebuilding contracts in Iraq, according to a task force created by the government to take advantage of business opportunities generated by the reconstruction of Iraq.

Foreign Affairs Secretary Blas Ople, on the other hand, is set to give a briefing to leaders of both chambers of Congress today on the deployment of a 500-man humanitarian contingent to Iraq. Congress earlier opposed the move because it would require P600 million to deploy the contingent.

Philippine Public-Private Sector Partnership for the Reconstruction and Development of Iraq chairman Roberto Romulo said the American firms will be outsourcing up to 70 percent of their manpower needs, preferably to countries who were part of the "coalition of the willing."

The 14 firms awarded various contracts are: Bechtel Corp., Black and Veatch, Cargill, Creative Associates International, Flour Daniel, Halliburton, International Resource Group, KBR, Louis Berger, Parson Corp., Perini Corp., Research Triangle Institute, Stevedoring Services of America, and Washington Group International.

President Arroyo, to help market the Philippines to these primary contractors, is set to meet with executives from these 14 companies on May 21, when she is in the US for a state visit, Romulo said.

Romulo, together with the task force’s executive director Jun Campillo, will leave for Kuwait today to set up a representative office and work with reconstruction teams assembling there to make experienced Philippine companies and skilled workers available to the region.

The prospects of securing a fair amount of reconstruction subcontracts, according to Romulo, are good considering the Philippines’ track record in infrastructure development in the Middle East.

"But we have to act quickly to establish our role because there are about 50 members of the coalition and most are angling for a piece of the action," he said.

The US Congress has allocated US$2.4 billion for the Iraq reconstruction program, and contractors are expected to go back for more in a few months. Romulo said some media estimates of the reconstruction cost reach as high as US$100 billion over the next five years.

Iraq is expected to manage the long-term reconstruction of its infrastructure, and fund it through Iraqi oil revenues, which stood at US$18 billion to US$24 billion a year before economic sanctions were imposed on Iraq after the 1991 Gulf War.

Apart from public works and energy industry projects — areas in which the Philippines has traditionally been strong — non-core activities like IT, finance and accounting, catering and logistics also offer huge business process outsourcing opportunities, Romulo said.

"The best opportunity is for experienced Philippine companies and skilled workers because the primary contractors have first-hand experience with Philippine companies and skilled labor," he said.

Romulo, who returned from a mission to Washington recently, added that "it’s not just a question of sending people, because there is scope to do a certain amount of back-processing here."

He said that one of the 14 firms, Flour Daniel, has long had about 800 Filipino engineers doing designs for some of its projects overseas.

The President named Romulo as chairman of the task force, with the rank of a Cabinet secretary. Members of the task force include Ople, Labor Secretary Patricia Sto. Tomas, Energy Secretary Vincent Perez, and Trade and Industry Secretary Manuel Roxas II.

The private sector members are EEI Corp. CEO Rizalino Navarro, DMCI AG & P CEO Cesar Buenaventura, ICTSI president Enrique Razon Jr. and Philippine Constructors’ Association president Emilio Tumbocon. – With Pia Lee-Brago