600m USD: Iraq’s debt to Iranian constructors

According to the International Consultants and Contractors Association of Iran (ICCA), there are 40 Iranian construction companies working in Iraq who despite all difficulties and limitations in competition with other nationalities try to keep their activities alive.

Mr. Irag Golabtunchi, the Head of Iraq-Committee of ICCA, says that the Iraqi government has a debt of 600 million USD to these Iranian companies and to clear this debt needs Iranian government support.

He also notes that the construction market in Iraq is estimated to be worth 300 billion USD and if the Iranian engineering companies succeed to win 10 percent of this market, it would be significant source of income for the construction sector and related industries.

However, the main difficulty to close a contract with the Iranian companies is that  theycannot provide letter of credit from Iranian banks and therefore cannot win new projects.

A solution might be found if the Central Bank of Iran could reach an agreement with the Iraqi partner in order to use Iranian Rila or Iraqi Dinar for which Iranian banks can provide letter of credits.