France builds Iraq business centre to lure firms

* Lack of security no longer an excuse

* Embassy builds boutique hotel, swimming pool

* Time to come to Iraq is now, embassy believes

By Aseel Kami

BAGHDAD, July 8 (BestGrowthStock) – France has taken a leap ahead of
its rivals in the race to tap investment opportunities in Iraq
by building a heavily fortified business centre and boutique
hotel where businessmen can sleep, eat and work in safety.

The complex financed by private companies near its embassy
in Baghdad’s once glamorous Abu Nawas neighbourhood has room for
20 offices — half of which have already been claimed by major
firms — and 10 bedrooms for visiting would-be investors.

“We say this is the time to come back to Iraq,” said Julien
Kerdoncuf, deputy head of the embassy’s economic department.

The firms say “yes”, he said, speaking in English, but note
that insecurity, as Sunni Islamist insurgents continue a
campaign of suicide bombings and killings, remains a concern.

“And what we say is: ‘Listen, we take care of that, we
arrange everything, you get offices, you get swimming pools, you
get hotel accommodation, you get food over there, and security
is everywhere, everything you need, so you do not have an excuse
not to come’. It is time to come — and actually they are
coming, that is the big deal.”

The companies that have installed themselves in the French
business centre include Lafarge (LAFP.PA: ), a pioneer of
investment in Iraq which already has cement plants in
semi-autonomous Iraqi Kurdistan and has just started a $200
million renovation of an Iraqi state-owned cement plant in
Kerbala.

Others are oil contractor Technip SA (TECF.PA: ) and
engineering firm Alstom (ALSO.PA: ).

Oil major Total (TOTF.PA: ), which has partnered with China’s
CNPC to develop Iraq’s giant Halfaya oilfield, plans to move
from Baghdad’s Green Zone government and diplomatic enclave to
the business centre, French diplomats said.

Emerging from war, Iraq is trying to shake off years of
violence, sanctions and economic decline by opening up its vast
oil reserves — the world’s third largest — and attracting
foreign investment and expertise to help it rebuild.

But while it has signed 11 deals with global oil companies
to develop its richest fields, projects outside the energy
sector have rarely gone beyond aspirations. Lingering violence
and political uncertainty, four months after an inconclusive
election, are keeping most western investors on the sidelines.

Of those brave enough to invest so far, Iranian, Turkish and
Gulf companies lead the pack, especially in Shi’ite tourism,
housing and banking.

The United Arab Emirates is the biggest investor in large
projects, with total pledges of $37.7 billion, while Lebanon
tops the list of investment deals below $1 billion, according to
a report last year by Dunia Frontier Consultants.
(For a list of non-oil investment projects in Iraq click on
[ID:nKAM126516])

GROUND FLOOR

France opposed former President George W. Bush’s 2003
U.S.-led invasion of Iraq. Now as a fragile peace returns, it is
getting in on the ground floor, said Ambassador Boris Boillon.

In addition to Lafarge, which produces 60 percent of the
cement sold in Iraq, car maker Renault (RENA.PA: ) has signed an
agreement to assemble trucks in two plants, one south of Baghdad
and the other in the Kurdish region.

Boillon said apart from the issue of security, Iraq suffered
from an excess of red tape and corruption that could undermine
profitability. The Iraqi government was also moving too slowly
to approve plans and projects and put them in motion.

“I am not exaggerating if I say there are 50 (French)
companies now waiting for an Iraqi decision to create a plan, a
project. Iraq was considered too dangerous before. Now the
question is not of security, it is more about economic
profitability,” he said.

“Now it is important to send the right messages regarding
profitability, the struggle against corruption and bureaucracy.”

Eric Noel, international sales director for defence, space
and security for Communication & Systemes, used the dining room
of the business centre recently to host officials from the Iraqi
Communications Ministry with which CS signed a deal a year ago.

“Of course security is a major concern,” Noel said. “It has
been improving in recent years and months, however it requires a
lot of planning … to move around.”
(Editing by Michael Christie and Mark Trevelyan)

France builds Iraq business centre to lure firms