Thursday, April 1, 2010

Iraq Goes On A Building Spree

In 2009 a study by the United Nations Human Settlements Program estimated that Iraq was short some 1.5 million houses. It said that the average Iraqi family in Baghdad had almost 7 people, and had to share a two-bedroom apartment. It calculated that around 60% of the houses in the capital needed “major rehabilitation,” and that slum areas like Sadr City and Ur were in the worst condition. This year local governments across the country are attempting to address this issue with a mix of private and public investment.

Maysan, Wasit, Muthanna, Qadisiyah, Basra, Najaf, Dhi Qar, and Diyala all announced development projects this year. On January 21, 2010 the Investment Commission of the Diyala provincial council announced that it had signed a $247 million deal to build 3,000 apartments in the eastern half of the governorate capital Baquba. The apartments would be sold for $40,000-$50,000, a hefty price seeing as that the average Iraqi working for the government, the largest employer in the country, only makes $200-$300 a month. On January 26, Maysan said that it had opened three locations for houses, parks, and hotels, while the next month Iran signed a deal for 10,000 housing units in the provincial capital of Amarah. In February, Wasit’s provincial council held a press conference to show off designs for a residential area in Kut. The project will cost $41 million, and be done by two local companies with U.S. and British help. Muthanna also signed a deal with a Swiss firm to build 3,000 housing units for poor families, Qadisiyah inked a contract with a German company to build 10,000 units, and the Vatican offered to finance a housing project in Basra using a Swiss and United Arab Emirates company. The Iraqi and Jordanian governments signed a memorandum of understanding to encourage investment in housing construction as well. Finally, in March, a British firm won a contract for $296 million to build 3,000 houses in Najaf, Dhi Qar started work on 1,800 apartments in the city of Nassirya at a cost of $160 million, and a Dutch company said it would build 836 houses in Hilla over the next two years.

The largest housing projects are planned for Baghdad. In January, the Baghdad government announced that it would begin work on almost 300,000 apartments across the city. The first phase would begin in Sadr City in eastern Baghdad, where 150,000 apartments, shops, a hospital, a university, and entertainment centers would be built over 10 years for a cost of $10 billion. Sadr City is one of the poorest areas of the capital, and is known for its lack of services. A British architect company was hired to design the project, while the money will initially come form the provincial council. The local government also contacted a UAE firm to build 65,000 apartments, a hospital, and sports facilities for $16 billion in a former military base in eastern Baghdad. A third project for $5-$6 billion is also planned for western Baghdad, and the provincial council has asked foreign companies to bid on building an additional 75,000 apartments. In March, an additional project for 1,824 houses near the International Airport in the western half of the capital was also revealed. The project is planned for 3 years at a cost of $111 million.

Baghdad might have the worst housing problem in the country. Due to poverty and the mass movement of people throughout the city during the war and sectarian fighting, houses and apartments have been subdivided and divided again, land has been sold off to build units in a haphazard way, squatting is rampant, and shanty towns have sprung up. As a result, it’s believed that where 4-7 people use to live in a house, a unit could now hold up to 25-40. On certain streets, the number of houses has multiplied from 20-24 per block to 40-60. All of this happened with no government oversight, and the provincial council is now trying to rectify that. It has set up a committee to go through building permits and land deals to try to calculate just what the living situation is in the capital. The government is also going to start demanding permits for construction and land sales, and issue fines for violators.

All of these projects are in southern and central Iraq. The launching of large developments plans are much more difficult in Ninewa and Tamim because of the political and ethnic divisions there. In Ninewa for example, there are two separate and non-cooperating administrations, one run by the al-Hadbaa controlled provincial council, and another by the Kurds. Tamim has a similar divide between Kurds, Arabs, and Turkmen. Housing projects there could be conceived of helping one group over the other or a way to change the demographics of the governorate. It’s unknown why Anbar has not joined the housing trend as after the January 2009 provincial elections, the new governor tried to promote investment and growth there. Now that security is better in Iraq, the government needs to begin development plans like these. Despite its great oil wealth, the average Iraqi is rather poor, and struggles with a lack of services. The war also caused massive displacement with 2.9 million internal refugees. The authorities need to begin investing in the public, and attract foreign money and know how as well to assist. Hopefully all of these projects will be completed, and begin to alleviate the country’s housing shortage, and more importantly improve the standard of living for a people that have suffered thirty years of wars and sanctions.

SOURCES

Aswat al-Iraq, “3 Locations in Missan for Investment Projects,” 1/26/10
- “10,000 Houses for West Diwaniya,” 3/2/10
- “Big Residential Compound in Diala – Source,” 1/21/10
- “Conference to Show Designs in Wassit,” 2/2/10
- “Investment permits given to several projects in Baghdad,” 3/16/10
- “Residential Compound’s Cornerstone Laid in Nassiriya,” 3/17/10
- “Swiss Firm Wins Housing Contract,” 2/11/10

Aswat al-Iraq, Eye Media Company, “International Companies in New Housing Projects,” Iraq-Business News, 3/16/10

Aswat al-Iraq, Iran Daily, “Foreign Contruction Companies Needed for Housing,” Iraq-Business News, 2/28/10

Al-Dulaimy, Mohammed, “Iraq’s Anbar still reeling from war that cost jobs and lives,” McClatchy Newspapers, 8/18/09b

Hasan, Faleh, “Capital Tackles Housing Woes,” Institute for War & Peace Reporting, 3/25/10

Reuters, “Baghdad Plans 75,000 Apartments to Modernize Slum,” 1/22/10

Saleh, Kahyoon, “Vegetable price soar in Iraq as government bans imports,” Azzaman, 3/23/10

Special Inspector General for Iraq Reconstruction, “Quarterly Report and Semiannual Report to the United States Congress,” 1/30/10

4 comments:

Ali Wasati said...

Hi again (-:

I really hope you dont mind me asking you a million questions all the time, but your articles intrest me extremely, and your knowlege is appreciated.

Two things stand out, firstly we have heard a lot before about building this, or that. A project here and over there, from the Iraqi government but nothing materilises. So in your view how reliable are these intentions and will they come to bear fruit in your view. How can a foreign company from Swiss, Holland, UK etc operate in Iraq.

Number two, most of these housing projects are flats, from studies i did in sociology, this could cause social problems, a kind of vertical shanty towns, when infact iraq has a lot of space, and houses would have been better. In the UK, they are now demolitioning all those flats, due to crime, drugs etc. Wouldn't it have been better to allocate poor people land, and materials with some funds to build there houses or time?

Joel Wing said...

Yes, the government does have a real problem following through on its promises for big projects. I have no idea on how many of these housing projects will be completed.

With the foreign companies they will get a contract from the provincial council to do the work, but they can't have ownership of the units because of Iraqi laws.

Last, from what I read, only two or three of those housing projects are going to be specifically for the poor, such as the one in Sadr City. The proposed prices for some of the others seem high so they will hopefully get a mix of people living in them. Whether they will become slums I don't know. I don't think the government would trust giving out land for people to build their own homes. They seem pretty much into top-down, centralized control.

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