Shadow contracts, smoke, mirrors keep the lights out in Iraq

In the Baghdad suburb of Sadar City, dazzling election campaign posters dotted with forests of hanging electric wires in the alleyway leading to the house of Abu Ammar.

But his mind is far away from the federal election to be held in Iraq on October 10. The social welfare payment for a 56-year-old retired soldier, let alone electricity, is barely borne by the cost of food and medicine. Despite a prolonged shutdown from the national grid, Mr. Abu Ammar cannot afford the generator.

When the lights go out, he has no choice but to steal power from the neighbor’s line. They don’t have the right political ties to get power, otherwise, they say, a weak man is sitting in a Spartan meeting.

In this country, if you don’t have these contacts, “your situation will be like ours,” says Mr. Abu Ammar.

In Iraq, lightning is a strong symbol of endemic corruption. This persists after each election cycle: Once the results are out, politicians jockey for appointments in a flurry of negotiations based on the number of seats won. Ministry departments and state institutions are divided into areas of control between them.

In the Ministry of Power, this system has enabled under-the-table payments to political elites, who siphon off state funds from companies contracting to improve the delivery of services.

A dozen former and current ministry officials and company contractors described the ministry’s political appointees, secret partnerships between political parties and companies secured through intimidation and mutual benefit, ensuring that a percentage of those funds went to the party. ends up in the treasury. All spoke on condition of anonymity because they feared reprisal from political groups.

“Corruption occurs as a personal act or out of political interest,” ministry spokesman Ahmed Moussa said. “It happens everywhere in Iraq, not just in the Ministry of Power.”

Meanwhile, the public is outraged that in Iraq, a major oil-producing country with abundant energy resources, the prospect of 24-hour electricity is a distant dream. Neighborhoods across the country face daily damage – up to 14 hours during peak summer in the poorer southern provinces, where temperatures can reach as high as 52 °C (125 °F).

It’s a riddle that baffles energy experts.

“The technical solutions are obvious, and that’s not happening. One has to ask why?” Ali Al-Safar of the International Energy Agency said.

shadow contract

In June, an Iraqi businessman received a call from a representative of the Sadrist Movement’s Economic Committee, led by Muktada al-Sadr, a sect-like Shia cleric whose party won the most seats in the 2018 election.

The representative, Abbas al-Kufi, wanted to see him. He was informed that the businessman met with officials from the Ministry of Power to discuss a multi-million dollar project to increase tariff collection owed to the government by consumers. Pay is rarely done in Iraq.

In Mr. Al-Kufi’s office, after the deal was finalized and the ministry paid the invoices, the businessman was instructed to pay 15% of the earnings in cash.

“He told me, ‘The Ministry of Power is mine, my party’s,’ and I cannot do anything without his approval,” the businessman was quoted as saying by Mr. Al-Kufi, adding to the untold influence cemented by the Sadrist. holds on. The powerful militia branch of the movement.

“They are not shy,” said the businessman. “They say to you: ‘If you don’t follow us, we will hurt you.'”

Mr al-Kufi, who was once a militia figure in the fight against the Islamic State group, is the latest example of the party’s economic representatives, which have had strong-armed companies for years.

Through coordination between ministry loyalists, company officials and parliamentarians, representatives like him are appointed to ensure that certain contracts are approved, choosing a contractor of their choice to execute them. and given to the party, as per the officials of the six companies involved. Process from 2018

Mr. Al-Kufi’s name appeared in local media in July after a letter purportedly written by former Electricity Minister Majid Hantoush accused him of undermining the ministry’s work. Mr Hantoush, who later resigned, declined to write it.

Nasser al-Rubai, the head of the Sadrist Movement’s political wing, said his party earned the power ministry because it won the most parliament seats in the 2018 election. The ministry, with its high state budget, is most in demand. He confirmed that Mr al-Kufi was a Sadrist figure, but denied the allegations against him or the movement, saying they amounted to “slander”.

The contractors said that intimidation is standard operating procedure in the power ministry. An official of a large multinational company said they were ordered to sub-contract a local company as a package of deals worth billions was being negotiated with the government.

“It was made clear to me: ‘Either you join us, or you will get nothing in the end,'” he said.

In order to secure funds for payment, sometimes more expensive material is invoiced than the material actually purchased. One official estimates that these schemes have caused “billions” of losses since 2003, but exact figures are not available.

Officials who question why contract prices are raised have received warnings, raising objections to a power plant in northern Salahdin province valued at more than $600 million. He said he got a call when it became clear he would not sign the deal, he said.

Be careful, he was told.

challenging equation

Every power minister since the US-led invasion of 2003 to dictator Saddam Hussein has faced this difficult equation: Iraq should be able to produce more than 30,000 megawatts of electricity, enough to meet current demand. But only about half of it reaches the consumers.

Poor infrastructure, unsuitable fuel and theft account for 40%-60% of losses, one of the highest rates in the world. In the poorer South, heat, urban expansion and illegal housing put even more pressure on the old grid.

Revenue collection is meager and subsidies are astronomical. The ministry collects less than 10% in billing. In December, a parliamentary committee reported that $81 billion had been spent on the power sector since 2005, yet outages were still the norm.

The future is bleak.

Demand is expected to double by 2030, with Iraq’s population increasing by 1 million per year. The International Energy Agency estimates that by not developing its power sector, Iraq has lost $120 billion in jobs and industrial growth between 2014-2020, as demand is not met.

a high price

A hidden cost of Iraq’s electricity crisis: the sleepless.

Uday Ibrahim Ali, a generator repairer, is regularly woken up for immediate improvement in Basra’s Zubair neighborhood. Her clients beg her: their children are struggling to sleep in the sweltering heat. “Can I ignore them? I can’t,” he says.

In the summer of 2018, poor electricity service led to protests in Basra that killed at least 15 people. A year later, mass protests crippled Baghdad and the south of Iraq, as thousands condemned the rampant corruption affecting service delivery.

Independent candidates expelled from the protest movement in Basra are giving priority to electricity in preparation for the elections. With temperatures dropping in September, power cuts are less frequent. To avoid protests before the election, Iraqi officials also improved the distribution.

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