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Sun 16 May 2004 04:00 AM

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Iraq’s security situation puts contracts in doubt

AMEC claims that up to US $800 million worth of contracts in Iraq are in doubt because of the continuing conflict while Halliburton reveals big worker backlog

AMEC, the world’s third- biggest engineering-design company has said that up to US $800 million worth of contracts in Iraq are in doubt because of the continuing conflict in the war ravaged country. Amec has started work on an order to restore Iraq’s water and sewage services amid continuing uncertainty and an unpredictable security situation.

General Electric, Siemens and other companies have suspended work in Iraq after a spate of kidnappings raised concerns about the safety of foreign workers, while Waertsilae Oyj, the world’s biggest marine engine manufacturer said that the profitability of a $415 million power-plant contract may be affected by the turmoil there.

April was the bloodiest month in the Middle Eastern country since last year’s US-led invasion, with 135 American soldiers killed in action, more than during the war itself.

“Security challenges in the region make it difficult to predict the value of work that will be completed in 2004,” Northwich, northwest England-based Amec said.

The company already has employees on the ground in Iraq as the first work packages come through, an Amec spokesman said. However, the spokesperson would not reveal how many people are involved.

Amec secured its Iraq contracts as part of a joint venture with US partner Fluor Corp. The water-restoration project is worth as much as $540 million to the UK-based company, which has also secured contracts to rebuild Iraqi power plants through its relationship with Fluor. Together, the companies have won business valued at around $1.6 billion. Amec’s order backlog stood at about $5.3 billion at the end of last year, excluding contracts such as rail maintenance, the company said.

“The board is now of the view that any overall recovery in Amec’s North American industrial markets in 2004 will not result in any material improvement on its expectations for this year,” a spokesperson said.

Meanwhile, US contractor Halliburton has revealed it has a backlog of 100 000 applicants seeking jobs with the company in Iraq, despite a spate of attacks on civilians there, its chief executive said.

Dave Lesar, the head of Halliburton, said reports of the company’s workers leaving Iraq to return to the US because of the heightened hostilities were overblown.

“I think a lot fewer people have come back than you might hear about in the media. I think there was an initial issue with respect to people thinking about it. But at the end of the day, when they had to make the decision to come back, many of them didn’t,” he said.

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