Ukrainian company to equip Iraqi army
Last Tuesday the Ministry of Foreign Affairs confirmed reports that a Ukrainian company has signed the first contract related to the reconstruction of Iraq. Ukraine will thus make its presence felt in that postwar country not only in the military-political sphere but also in the economic one.
“We can now say that the first contract has been signed,” said ministry spokesman Markiyan Lubkivsky. He did not disclose the company’s name on the following grounds: “As it is a question of economic secrets, I would rather not divulge the contract’s details.” The diplomat also expressed hope that the first signed contract would “provide a good stimulus” for other companies to submit bids. Minister of Defense Yevhen Marchuk confirmed this contract earlier while speaking on the Cabinet of Ministers’ “hot line.” His statement served to dispel some doubts and speculations surrounding this mysterious agreement.
The point is that the results of the Iraqi army procurement tender were announced back on May 24. The international mass media reported, incidentally, that the winner of the contract was the ANHAM Company. Yet, sources reported quite a different estimate of the value of this contract. For instance, the Pentagon quoted a figure of $120 million, while most US newspapers mentioned $259 million. However, the most interesting thing is not the value but the fact that, under the contract, Ukraine is to manufacture 65% of the total equipment for Iraq’s army; in other words, Ukraine will be a subcontractor. The contract also involves the US, Canada, Britain, Romania, and China, but their contribution is far smaller than Ukraine’s. On the other hand, this is not necessarily a decisive factor because the wide range of work that needs to be done does not always entail an equally substantial share of profits. Moreover, nothing is known about what exactly, what work Ukraine should be doing. Some reports allege it is not a question of supplying weapons. At any rate, Ukrspetseksport executives denied rumors that their company has anything to do with this contract. According to other reports, some well-known Ukrainian companies will be supplying uniforms and trucks to the Iraqi military. Any of these versions is feasible for the simple reason that ANHAM will deliver a wide range of items to Iraq — tents, ordinary and automatic rifles, trucks, etc.
What kind of company is ANHAM? It turns out to be a joint venture based in Vienna, Va., consisting of US, Saudi Arabian, and Jordanian firms. The Washington Post notes it differs very little, structurally, from another US company, Noor, that won the first stage of the bidding last January. Other bidders ended up challenging the results. The documents recording the bidding procedure contained some mistakes, which made it necessary to invite new bids. Other companies besides ANHAM were again disappointed by the results. Still, going by press reports, none of the bidders is going to demand a revision of the second tender. Incidentally, Bumar, a Polish ordnance company submitted a bid this time around. Its manager Roman Baczynski shed some light on why the bidding commission (read: the Pentagon) opted precisely for ANHAM. “We offered quite a reasonable price, but we were unable to meet the deadline.” He says that the first batch of 500 trucks must be delivered to Iraq as early as August. Bumar proved unprepared to meet the deadline.
The Pentagon set two main criteria: deadlines and a reasonable price. US top brass have repeatedly expressed their indignation over delays in announcing the contract winner, because this primarily affects the Iraqi military that cannot adequately do their duty. The US media have stressed that as a result of this the Iraqis failed to resist the Mahdi’s Army extremists, which in turn calls into question the transfer of authority to the Iraqi government scheduled for June 30. Maj. Gary Tallman, spokesman for the Army on weapons and technology issues, announced that ANHAM would begin supplying the Iraqi army as early as July 15. It is reported that the contracts binds an unnamed Ukrainian company to equip fifteen battalions and six brigades of Iraq’s armed forces. According to the US Department of Defense, this work will be completed by September 30, 2006.
Up to eighty Ukrainian firms, including Stirol, Naftohaz Ukrayiny, and AvtoKrAZ, made bids to contribute to the reconstruction of Iraq. It is difficult to predict how successful their efforts will be, but there is already a worthy example for others to follow.
