Iraq plans to sell shares in $1.3b Grand Faw Port plan
Iraq plans to sell shares in $1.3b Grand Faw Port plan Iraq originally proposed Grand Faw in 2011 for $17b
Published: 17:14 December 29, 2015
Arbil: Iraq aims to sell shares to the public in the $1.3 billion (Dh4.7 billion) Grand Faw container port first proposed in 2011 before falling oil prices crimped the government’s ability to support the project on its own.
The local government in Basra in southern Iraq where the port is planned will seek permission in the next few days from the central government to set up a holding company to sell the shares, Sabah Al Bazooni, head of the Basra provincial council, said in an interview. Iraq has banned the holding company structure since the days of the late toppled leader Saddam Hussain.
Iraq originally proposed Grand Faw in 2011 for $17 billion, all covered by the government and including an oil export platform. Since then, Brent crude prices have dropped more than 70 per cent, leaving the government with a budget deficit estimated at 24 trillion dinars ($20 billion) for next year. The oil export platform has been dropped.
Tensions with Kuwait
Plans for the port have led to tensions with neighbouring Kuwait, which is building the Mubarak Al Kabeer container port project also on the Arabian Gulf. Tensions persist since Iraq under Hussain invaded Kuwait in 1990. Iraq had expressed concern that the Kuwaiti port may hamper maritime access to Grand Faw. Plans for the ports aim to become a gateway for Gulf products going to Turkey and Europe.
The Basra provincial council wants to list the holding company on the Iraq Stock Exchange, with the public shares representing a 25 per cent stake, Al Bazooni said. The local government would own 26 per cent and foreign investors 49 per cent, he said.
The council is in talks with US and Chinese companies to invest in the projects, Al Bazooni said. He declined to identify them. The port would have 25 to 30 platforms for containers.