Банкеръ Weekly

Briefs

SIX BULGARIAN FIRMS STEPPED INTO IRAQ

It turned out Bulgarian companies' chance to take part in the post-war reconstruction of Iraq through bidding in tenders for subcontractors of big world companies is tiny and there has been no success so far. The other way leading to the Iraqi market is the Oil-for-Food Programme of the United Nations (UN). Its implementation began in 1996, but was interrupted by the war. In March 2003 the UN Security Council approved Resolution 1483, stipulating that the progarmme should be completed by November 21, 2003. Currently, there is some USD2BN in its accounts collected from the sale of Iraqi oil and the money will be given to firms which have closed contracts for the fulfillment of various humanitarian projects in the Arab country. Applications for participation in the resumed Oil-for-Food Programme have been filed by 700 Bulgarian companies, but only Electroimpex, Machinoexport, LB Bulgaricum and the Yambol-based Sila, have so far got a chance to renew their contracts from prior the war.Electroimpex has signed a contract for delivery and assembly of equipment for three electricity substations in the regions of Basra. Before military operations began the company had implemented 14% of the project, worth USD1.2MN. The entire project is worth USD8.8MN. The Executive Director of Electroimpex Dimiter Petkov said they'd ask for updating the contract's financial parameters, as the working conditions had considerably changed meanwhile. However, that demand would hardly be satisfied after a decison was made that the contracts would be fulfilled as per the terms at which they were signed. Machinoexport has undertaken to supply machines for the oil-extracting industry, LB Bulgaricum has a contract for delivery of powder milk, and the Yambol-based Sila will continue the implementation of its agreement for delivery of agricultural spraying machines. Direct negotiating is the third possibility for participation in the post-war reconstruction of Iraq. Two Bulgarian firms - SOMAT and ProSoft - have so far seized that opportunity. SOMAT transports goods of German and other firms from Western Europe, whose final destination is Northern Iraq. The agreements were reached during the World Economic Forum, held in Jordan's capital Aman in end-June. The company's first truck entered Iraq in mid-July. One haulage costs an average of USD20,000. SOMAT's Marketing Director Dimiter Nikolov said in front of the BANKER weekly that the transported volumes would increase and Bulgarian goods could be included as well. Regarding ProSoft, the firm signed in Aman a contract for assembly of computers with the US company Jordan Modern Technology, but its fulfillment has not begun yet. During the forum in Aman the Union of Bulgarian Employers presented a project for the establishment of a free trade zone at the border between Iraq and Jordan. The proximity of Jordan banks to the zone will guarantee to a greater extent the payments of individual firms. Vassil Vassilev, Chairman of the Management Board of the Union of Bulgarian Employers, hopes an agreement for the project's implementation would be signed by the beginning of October.

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