In 2012, the Ministry of Housing and Reconstruction undertook the highest number of projects in its history. Do you think 2013 will see a similar number?
Yes. We expect that number to either remain the same or increase. Last year, we had multiple large-scale projects undertaken as part of our strategic plan. This year, we have a similar number planned, most of which are related to road construction. The Ministry has a strategic plan that covers multiple areas. The first is the construction of roads, bridges, and tunnels and the second is the construction of housing for limited income families.
There was no strategic plan for road construction within Kurdistan prior to 2010. We began to create a master plan in 2011, but we actually focused more on the individual components of the plan such as the traffic load in the region or the capabilities of existing roads. So, even before the master plan was completed in 2012, we already had an idea of what we needed and what the priority areas were. In 2012, the project was allocated to that year’s budget. So, the road map began in 2011 but wasn’t complete until 2012.
For limited income housing, the budget in 2011 was 49 billion Iraqi Dinar ($42 million). In 2012, the budget was increased to 200 billion dinar ($172 million) and we have proposed a similar budget for 2013 as well.
Are foreign construction companies involved in the bidding process for these contracts or does your ministry prefer to use more local companies?
We are not obligated to deal only with local contractors, nor only with foreign contractors. We deal with companies based on the qualification process. So with any company, whether it is foreign or local, that they are qualified for the project is the only thing that determines whether or not they will succeed past the pre-qualification stage to the second stage of the tender process.
That said local companies are able to complete the majority of the housing projects. Foreign companies are welcome to participate, but it is much harder for them to win these sorts of contracts. However, for the larger strategic projects, like road or specifically tunnel projects, there are no local companies involved. These are usually highly technical or difficult projects that cannot be easily completed. So, for these larger projects, we have a lot of foreign companies in competition. Even with the road projects that have budgets of more than $30 or $40 million, it’s either a purely foreign company or a joint-venture company doing the work.
So, with these larger road construction projects, what exactly is being done?
The master plan that we have created details road construction for the entire region, with an emphasis on two-lane roads linking the major cities of the region. Right now, most of the roads connecting the major cities are only one-lane roads. This is obviously not adequate for the traffic load we have right now. In 2003, on some of the major roads, there was an average of 200 to 500 vehicles per day. In 2010, the data collected indicated that the traffic rate increased on those same roads to between 3,000 and 5,000 vehicles per day. Today, the average is more like 5,000 to 8,000 per day. So, one-lane roads are not enough. The capacity needs to increase.
These numbers also give us an idea of the development that has taken place in the Kurdistan Region, and the amount of transport that takes place here. That can be personal transportation, but also transportation of construction materials, agricultural products, or industrial products. Essentially, it demonstrates the change in trade between the Kurdistan Region and its neighbors. That’s the main reason why this traffic load has increased so significantly.
Right now we have three tunnel projects under implementation and another two in the tendering process. In 2013, we will have the longest tunnel project in the region, which will be two tubes, each 5 kilometers long. Then there will also be multiple other tunnel construction projects. So, we have a plan with a targeted completion date of 2030, and we will do everything we can to achieve that goal, strengthen the infrastructure of the region, and improve the entirety of Kurdistan if possible.
Today, we have a shortage of roads that match our transport needs. So, by 2017, we hope to satisfy the demands of our traffic load. At that point, the system will need improvement. So, after 2020, we will begin work on the privately financed express motorways.
These large projects will require larger companies that can handle the responsibility and the technical work. So, looking at the companies that are presently working in the region, what do you think they are bringing to the table?
The Kurdistan Region does not have a lot of experience in institutional system management. We are new. However, also have a target that we hope to achieve. In the beginning, we were not a well-organized institutionally. However, we recognized this and decided to make the necessary changes step-by-step.
The tendering process today is not like what it was before. Now, we have the pre-qualification stage for the larger strategic projects. If any project is budgeted over $5 million, it is deemed a strategic project and we then have to follow a pre-qualification process. If a company wants to get involved, it is graded according to its technical and financial capabilities, as well as by the similarity of the projects it has completed in the past 5 years. As a result, we have been able to eliminate some companies that were not capable of completing these projects successfully.
For example, we recently began the tendering process for a new tunnel project. 91 companies expressed an interest the project. In the second stage, after the pre-qualification process, only 19 companies remained, and we sent invitations to bid to those 19 companies. So, the process has been improved. In the past, some of the projects may have been managed by companies that were not capable of completing them. Today, with the new system, I am confident that no such problems will be encountered and all the companies involved will be qualified and capable.
Which companies or types of companies would you say have had the most success here in Kurdistan?
Most of the companies involved right now are Turkish companies because they are well organized and because they were patient when they first got involved in the region. They came and established their footprints here, and didn’t expect to receive large projects after only one month. Some stayed here for two or three years without having the opportunity to begin work on a large-scale project. So, now, they have the experience, the technical and financial capabilities, and the necessary reputations.
However, this is not to say that Turkish companies are the only ones doing good work here in Kurdistan. The pre-qualification process is designed to make everything transparent and reward any company, regardless of its national origin, that has been determined to be capable. So, right now, we have numerous European companies getting involved.
When these foreign companies come to meet with us, we encourage them to investigate pursuing a joint venture with a local company. This option is obviously not mandatory. However, it can help the company to become more familiar with the institutional system of the region. Foreign companies may not be very familiar with our system, the prices of materials, or the availability of local manpower. Local companies have this knowledge. So, joint ventures can help these foreign companies more adequately prepare for working in Kurdistan.
I know that the targeted completion date for the roadmap is 2030. Can you tell us a bit about the timeline for the roadmap from now until then?
By 2020, we plan to have completed all the two-lane roads connecting the major cities in the region. These will be Class-A highways. After that, we will begin construction on an expressway that will be financed by investors rather than via government budget and will most likely employ a toll road system.
Today, we have a shortage of roads that match our transport needs. So, by 2017, we hope to satisfy the demands of our traffic load. At that point, the system will need improvement. So, after 2020, we will begin work on the privately financed express motorways. However, we still have to have enough alternative roadways that can be used free of charge. These roads also need to maintain all the required safety measures. Obviously, we want to implement both roadways. However, it’s not fair to say to our citizens that they either have to pay for the newer roads. We have to have alternative roads free of charge that comply with international safety regulations. Right now, we don’t have this. In 2017, we will.