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 Canadian Blue Fox co. trapped in bureaucracy in Iraqi Kurdistan

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Canadian Blue Fox co. trapped in bureaucracy in Iraqi Kurdistan ‎ 8.6.2012 

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Sulaimaniyah city. See Related Links
June 8, 2012

SULAIMANIYAH, Kurdistan region 'Iraq', — A Canadian company has filed a complaint against the former Ministry of Municipalities for the mismanagement of a tender.

The company filed the complaint in 2006 in the Sulaimaniyah court, but the court has not yet responded.

The complaint emerges from a project that the company won in two tenders but was never given. Instead, it was given to another company for more money than the Canadian company had asked for.

The story begins in 2004, when a project to design master plans for the cities of Kalar, Chamchamal and Raniya was put to a bid. In the bidding, the Canadian company Blue Fox won the project. But as a representative of the company says, the project was never given to them.

A committee from the Reconstruction Projects Office, the Sulaimaniyah municipality, the Ministry of Municipalities and an expert of master plan design from Baghdad University was formed to assess Blue Fox’s tenders. The committee, in a 40-page report, concluded that the tenders were valid.

Niyazi Hamid Ibrahim, a civil engineer and representative of the Blue Fox company in Kurdistan, who has hundreds of pages of documents about the tender, says, “Our company was supposed to design the Sulaimaniyah , Kalar, Chamchamal and Raniya city master plans. There were two tenders [one for Sulaimaniyah master plan, the other for the other cities]. We bid on both and won both tenders. We won because, as the assessment of the committee and the Baghdad University professor concluded, our company offered better tenders than the rest of the participating companies.”

The story, indeed, is a long one. The bidding took place on March 15, 2004. Blue Fox paid $2,000 to participate in the bidding, and a $100,000 deposit. Later, the American UEB assessed the company in four phases, for which the company paid $25,000 for each phase. The assessments were completed on May 22, 2004, at which point Blue Fox submitted a report to the Reconstruction Projects Office. The report was approved by then Prime Minister Barham Salih. In two letters in June 2004, the Reconstruction Projects Office asked the Ministry of Municipalities to go ahead and sign the project tenders with Blue Fox. In July 2004, then Minister of Municipalities Fatih Abdulla sent a letter to the Sulaimaniyah municipality giving the green light for the contracts to be signed.

The Sulaimaniyah municipality, which was directed by Qadir Hama Jan at the time, sent a letter in July 2004 to Blue Fox Company’s representative and advised the representative to have company staff appear at Sulaimaniyah municipality within five days to sign the contracts.

Ibrahim says that because the process had already gone on for so long, the company’s staff was in Canada. Although they returned to Kurdistan, problems with the contract began which resulted in staff going back and forth between different government agencies. “We would go to the ministry and they would tell us the ‘municipality has some concerns.’ We would go to the municipality and they would tell us the ‘ministry does not agree on the contracts to be signed.’”

“This whole thing brought shame on the Kurds,” Ibrahim says. He says requests were made for things not mentioned in the tenders, such as cars for the supervising committee, which the company complied with though the contract remained unsigned. During this period, Blue Fox opened an office and spent a lot of money. They sent several letters to the Ministry of Municipalities and the Council of Ministers, and even two letters to Jalal Talabani, the president of Iraq and leader of the Patriotic Union of Kurdistan (PUK) but received no answers.

Then a power shift happened in Kurdistan. Omar Fatah became the prime minister. Ibrahim says, “This made our problem more difficult. I do not know if Mr. Fatah couldn’t understand the issue or what. He might have understood it in a different way.”

Fatah referred the case back to the Ministry of Municipalities in August 2004. Blue Fox visited the Ministry of Municipalities on several occasions, but did not receive any answers. Ibrahim says, “After this, we sent a letter to Jalal Talabani. Talabani wrote on the letter ‘solve this problem.’ I took the letter to the prime minister. Mr. Fatah promised he would order the Ministry of Municipalities and Sulaimaniyah municipality to sign the contract. But they never did.”

Finally, the company was told that the prime minister believed the prices in the tender were too high, and the company needed to lower the price by 5 percent. Ibrahim says, “Our price for the three cities was $973,000, and the one for Sulaimaniyah was $130,000. In the end, we agreed to the 5 percent discount because we had spent so much money by that time. After all this, they still refused to sign the contract.”

In February 2005, the project was submitted for a new bidding. Blue Fox participated in the bidding and won the tenders again.

Ibrahim says, “I wish we had not won the project again. This time I was psychologically ruined. I was embarrassed. I had brought a Canadian company and told them Kurdistan was a developed region and ruled by a democracy, yet we had won a tender for the second time and no one was answering us. It was indeed an embarrassing thing for me.”

Once again, Blue Fox was not given the project, though they had won it for US$1.1 million. Suddenly, and without tenders or bidding, Zublin, a German company, got the project.

Ibrahim says, “The project was given to this other company without any legal mechanism. The German company specializes in dam construction and has no experience in master plan design. Their field is a completely different one. As the saying goes, ‘as different as chalk and cheese.’”

He added, “They told us our price was too high, but they contracted the German company for US$5.5 million for the Sulaimaniyah city master plan alone!”

A Zublin company representative, Bayar Muhammad, told the Awene newspaper in March 2006 that the company got the project without a tender. But in March 2007, the newspaper Kurdistani Nwe published an article that announced the Kurdistan Council of Ministers had decided to take the Sulaimaniyah master plan project from Zublin and give it to IGCO.

Ibrahim says that this time, too, the new company was given the project without a tender. “As far as I know, Zublin gave a down payment for the project. But, as for us, even though we rightfully got the project, we received no down payment. The other company, which was given the project finally, completed the project in 2012. The project has been completed with many shortcomings.”

Omar Mahwi, chairman of the Sulaimaniyah Municipality Council, denies that there are any shortcomings in the completed master plan. The reason for the delay of the project, says Mahwi, was lack of experience by local companies in the field. “This was a first experiment in Iraq. We tackled the master plan issue too early. That is why the project faced so many challenges,” says Mahwi.

Mahwi was a member of the Blue Fox’s tender committee in 2004. Regarding the reasons Blue Fox was not given the contract, Mahwi says, “I cannot remember the reasons. But whatever the reasons, that issue is in past now.”

The issue is not over for Blue Fox. Ibrahim says that, at the beginning of 2006, his company filed a complaint against the Ministry of Municipalities. “But up until today, the court has not summoned anyone for this case. We have visited [the court] on several occasions. Now we do not know what has happened to the documents and the files of the complaint.”

The court has only shown Blue Fox a response from the Ministry of Municipalities where it claims the bidding did not take place within their ministry. Ibrahim says, “The question is, if the Ministry of Municipalities does not have the documents for such a bid, who does?”

The Blue Fox representative believes that the situation led to this either due to ignorance or deliberately.

“A master plan is like a constitution for a city,” he says. “If you have a bad constitution, you will ruin that city. Sulaimaniyah has been run by a tribal system for so many years. Most of the land of the city were distributed to people based on privileges. A master plan could prevent such arbitrary distribution. The problems were created for [our] master plan mainly because of the latter.”

By Slam Saadi, Rudaw

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