meed-logo

line1 line2 line3
SIGN IN / REGISTER

Transport plans underpin Iraq’s reconstruction

25 May 2023

MEED's June 2023 special report on Iraq also includes:

> GOVERNMENT: Sudani makes fitful progress as Iraq's premier
> ECONOMY: Iraq hits the spend button​​​​​​​
> POWER: Iraq power projects make headway
> UPSTREAM DEVELOPERS: No place like Iraq for international oil firms
> OIL & GAS: Iraq's energy sector steadily expands
> TOTALENERGIES: Total to activate $27bn Iraq contract this year
> TRANSPORT: Baghdad approves funds for metro and airport projects

 

Iraq’s construction and transport sectors look to be turbocharged by its bumper 2023 budget, which envisages a series of major transport investments, alongside social infrastructure and housing plans.

With its new government in place since last year’s election and fiscally cushioned by higher oil prices, Baghdad has returned its attention to rebuilding and modernising the country’s ailing transport and social infrastructure in 2023.

Between 2016 and 2020, there were reportedly 971 reconstruction projects in the country, 718 of them completed. In 2021, the Fund for the Reconstruction of Areas Affected by Terrorist Operations completed 97 projects at a cost of ID86.7bn ($59.5m).

In 2018, Baghdad also released a forward-looking list of 157 projects in need of investment, with a $88bn price tag. These projects included the upgrade and repair of roads, bridges and airports, new city projects, and the rebuilding of hospitals, telecommunications and oil-related industries.

Despite rising revenues, Iraq’s contract awards in construction and transport decreased from $4.1bn in 2021 to only $0.6bn in 2022, according to MEED Projects.

The much larger awards value for 2021 was bolstered by several major contracts including  the Ministry of Education’s selection of China’s Sinotec and Power China for the construction of 1,000 schools in different parts of the country. The contracts, worth $2bn, were part of the “oil for reconstruction” and investment deal signed between Iraq and China in 2019. Under the agreement, Chinese firms work in Iraq in exchange for 100,000 barrels of oil a day.

In 2021, the Basra Provincial Council also awarded a $312m contract to the local Al-Narjess Trading & General Contracting for the phase 2 rehabilitation of roads, drainages and sewerage networks in Zubair City.

Big transport ambitions

Although beset by delays since its 2012 commencement date, the ID7.6tn ($5.8bn) Al-Faw Grand Port masterplan is one of the most significant projects under way in Iraq. Located on the northern tip of the Gulf, it is tentatively set to be completed by 2025.

With this flagship port heading towards the finish line, Baghdad is now making moves to expand upon its logistics potential and, specifically, Iraq’s ability to connect freight from the Gulf directly to Europe.

In April, the design was completed for the high-speed ‘Dry Canal’ rail link to Turkiye planned by the Ministry of Transport (MoT).

The scheme will connect the Al-Faw Grand Port in the south with northern Iraq and Turkiye through 1,200 kilometres of new electric railway track. It is one of the region’s largest rail schemes, and aims to provide a cost-effective overland route to Europe to rival the Suez Canal.

Last year, Italian engineering services company Progetti Europa & Global was appointed to carry out feasibility studies for the project. Current plans envisage high-speed trains operating alongside conventional passenger and freight trains. The MoT plans to tender contracts for the multibillion-dollar project by the end of 2023.

In addition to the rail line, Iraq’s Ministry of Transportation is considering a new highway linking the Al-Faw Port to Turkiye.

More recently, Iraq has approved funding for the first elevated metro in its capital and the expansion of Baghdad International airport, as part of the government’s 2023 budget. 

The funds will allow work to proceed on the much-delayed Baghdad elevated train project this year, while the airport expansion could start in the second half of 2023. Plans for the metro date back to the late 1970s, and if it had been built then, it would have been the first urban railway in the Arab world. The metro was also included in the 2022 budget, with the Ministry of Finance allocating $2bn to it.

Baghdad airport currently operates three terminals, each designed for 2.5 million passengers a year. The expansion will increase the capacity to 15 million passengers.

Other airport projects are also under way. In March 2022, the foundation stone was laid for Anbar International airport, and in April of that year, then prime minister Mustafa al-Kadhimi gave the green light for the rehabilitation of Mosul airport. 

In 2021, China State Construction Engineering Corporation finalised a $367m deal for the revived Nasiriyah International airport in Dhi Qar, with works commencing in February 2023.

In the past few months, Iraq has also announced over 150 public service and development projects in the capital Baghdad, including 70 road developments, pavements, bridges and overpasses, estimated to cost nearly $17bn over the first two phases.

Housing capacity

Meanwhile, Iraq’s housing shortfall of three million homes is rapidly becoming a major housing crisis for the government. The situation is being exacerbated by Iraq’s rising population. According to UN projections, the country’s population is projected to swell to 50 million by 2030, from around 44 million today.

Baghdad is advancing various large residential schemes to address this, the largest expected to be awarded this year being the mixed-use New Babylon City project. This is being developed by the Ministry of Housing at an estimated cost of $1.03bn. State entities are also taking matters into their own hands. Basra Oil Company, for example, is developing a $156m residential complex for its employees.

Yet such projects alone are unlikely to meet the soaring demand for affordable housing, which looks set to remain a key priority for the government for the foreseeable future.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10884758/main.gif
Eva Levesque

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Kuwait receives bids for Al-Khairan phase one IWPP

    2 June 2026

     

    Two developer consortiums have submitted bids for the first phase of Kuwait’s Al-Khairan independent water and power producer (IWPP) project, according to a source.

    Bids were received by the Kuwait Authority for Partnership Projects (Kapp) on 1 June.

    The facility will have a capacity of 1,800MW and 150,000 cubic metres a day of desalinated water. It will be located in Al-Khairan, adjacent to the Al-Zour South thermal plant. 

    The bidders include:

    • Abu Dhabi National Energy Company (Taqa) / A H Al-Sagar & Brothers (Saudi Arabia) 
    • Acwa (Saudi Arabia) / Gulf Investment Corporation (Kuwait)

    The Al-Khairan IWPP is being procured by Kapp in partnership with the Ministry of Electricity, Water & Renewable Energy (MEWRE).

    The main contract was tendered last September. Three consortiums and two individual companies were previously prequalified to participate in the tender.

    Ernst & Young, BNP Paribas, AtkinsRealis and Addleshaw Goddard are financial advisers on the project. Chadbourne & Parke is acting as legal adviser.

    The winning bidder will sign a set of public-private partnership agreements covering financing, design, construction, operation and transfer of the project. The energy conversion and water-purchase agreement is expected to cover a 25-year supply period.

    Future phases

    The Al-Khairan IWPP project is expected to run on low-sulphur fuel oil as the primary fuel and to accommodate crude oil, gas oil and natural gas as backup fuels. Future phases will further expand capacity.

    It is understood that the estimated $750m second phase of the Al-Khairan IWPP project will add a further 1,800MW of generation capacity through a combined-cycle gas-fired power plant.

    The project, first mooted over a decade ago, remains in the early development stages, with no plans currently to advance to procurement in 2026, a source said.

    According to the source, the immediate focus is on advancing plans for the 3,600MW Nuwaiseeb power and water desalination IWPP project.

    The Nuwaiseeb IWPP plant will have a desalination capacity of 75 million imperial gallons a day.

    Kapp plans to release a transaction advisory tender for the project by the end of the year.

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17072685/main.jpg
    Mark Dowdall
  • Doosan confirms Saudi Jafurah 2 cogen contract

    2 June 2026

    South Korea’s Doosan Enerbility has confirmed it has signed an engineering, procurement and construction (EPC) contract worth about $556m for the second phase of the Jafurah combined heat and power (CHP) plant in Saudi Arabia.

    The project is being developed by Korea Electric Power Corporation (Kepco) in partnership with Saudi Aramco.

    Doosan said the contract covers design, equipment supply, installation, construction and commissioning of the facility.

    The Jafurah CHP phase 2 project will be built near the Jafurah gas field, about 400 kilometres east of Riyadh. Once operational, it will generate 330MW of electricity and produce 465 tonnes of steam an hour for the nearby gas field.

    According to the firm, the project’s main steam turbine will be supplied by Doosan Skoda Power, a subsidiary of Doosan Enerbility.

    WSP is acting as the project management consultant for the project, which is scheduled for completion in 2029.

    The Jafurah gas development is part of Aramco’s $3.2bn unconventional resources programme, which aims to develop shale gas in three areas. Jafurah lies southeast of Ghawar, the world’s largest conventional oil field.

    The programme is part of Riyadh’s plans under Vision 20230 to ensure the kingdom remains self-sufficient in gas supply amid rising demand from the residential and industrial power sectors.

    Jafurah phase one

    In February 2025, MEED exclusively reported that talks were under way to expand the capacity of the $500m Jafurah cogeneration independent steam and power plant (ISPP).

    Construction works were completed on the facility last November.

    At the time of its procurement, the plant’s first phase was to have a power capacity of 270-320MW, and a low-pressure (LP) steam demand of 77-166 thousand pounds an hour (klb/hr) and high-pressure (HP) steam demand of 29-126 klb/hour by 2023.

    The LP and HP steam demand will increase to 283-373 klb/hr and 66-321 klb/hr by 2027, respectively.

    The oil giant issued the letter of award to Kepco for the contract to develop the Jafurah ISPP scheme in July 2022.

    Kepco subsequently awarded South Korea’s Doosan Heavy Industries & Construction the project’s EPC contract.

    US/India-based Synergy Consulting provided financial advisory services to Kepco on its bid.

    Sumitomo Mitsui Banking Corporation (SMBC) served as the client’s financial adviser for the project. Germany’s Fichtner Consulting Engineers is technical consultant, while the UK’s Wood Group is project management consultant.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17072199/main.jpg
    Mark Dowdall
  • Al-Mabanee submits lowest bids for Kuwait infrastructure

    2 June 2026

    Kuwait’s Public Authority for Housing Welfare (PAHW) has opened commercial bids for two major infrastructure and public buildings packages at South Al-Mutlaa Residential City.

    Local firm Al-Mabanee United Company has emerged as the lowest bidder for both contracts, submitting combined offers worth KD44m. Both packages entail the construction, completion and maintenance of services, infrastructure works and public buildings for different district centres within the city.

    The first contract covers the infrastructure and public buildings for the N3 District Centre. PAHW received proposals from eight bidders, with Al-Mabanee United Company submitting the lowest price at KD20.9m. The second-lowest offer was submitted by The Contractor General Trading & Contracting Company at KD22.4m, followed by Golden Engineering Group for General Trading & Contracting at KD22.7m, though Golden Engineering Group was flagged for not providing a bid bond.

    Al-Khonaini General Trading & Contracting Company, operating as Inshat Al-Khonaini, ranked fourth with a bid of KD22.7m, followed closely by Kuwait Industrial Centre Company at KD22.8m. Combined Group Contracting Company submitted a bid of KD23.8m, Al-Dar Engineering & Construction Company bid KD25.7m, and China’s Sichuan Road & Bridge Group Corporation submitted the highest active proposal at KD29m. 

    The second contract is for identical infrastructure and public building works at the N1 District Centre. Al-Mabanee United Company submitted the lowest bid of KD22.8m. Its closest competitor was The Contractor General Trading & Contracting Company, which submitted an offer of KD23.9m.

    Al-Khonaini General Trading & Contracting Company came in third with a bid of KD24.2m, followed by Kuwait Industrial Centre Company at KD24.4m and Golden Engineering Group for General Trading & Contracting at KD24.4m. Combined Group Contracting Company placed a bid of KD26m, Al-Dar Engineering & Construction Company bid KD26.5m, and United Construction Company, known as Al-Inshat Al-Muttahida, submitted an offer of KD 30.9m. Al-Ghanim International General Trading & Contracting filed the highest bid at KD344m and was also noted for lacking a bid bond.

    South Mutlaa Residential City is a large-scale planned development designed to accommodate around 400,000 residents in a modern, fully serviced urban environment. Once completed, it will offer contemporary housing alongside extensive logistical services and a wide range of public and commercial areas, including hospitals, schools and other social services.

    The project also includes major infrastructure works such as approximately 150 kilometres of roads and related structures, lighting and other public works, as well as integrated systems for water distribution, rainwater collection and sewage. In addition, it will provide the civil infrastructure needed for electricity distribution, telecommunications networks and traffic control to support a well-connected, functional city.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17071938/main.gif
    Colin Foreman
  • Local developer secures finance for three Riyadh projects

    2 June 2026

    Qimam Noshoz for Real Estate Development Company, a subsidiary of Saudi Arabia’s Banan Real Estate Company, has signed a sharia-compliant credit facility agreement worth SR84m ($22.4m) with Riyad Bank to fund three commercial, hospitality and sports developments in the kingdom.

    The financing agreement is split into two distinct tranches to align with the projects’ development timelines. The first tranche consists of SR49m with a maturity duration of seven years, while the remaining SR35m has been secured for an eight-year term.

    Qimam Noshoz will utilise the capital to fund construction works for the Al-Rahmaniyah Gem and Al-Wadi District Gem projects. Both of these projects are already leased to the fitness operator Armah Sports Company. The other project is an independent hotel located within the Al-Wadi District.

    The Al-Wadi development is designed as an integrated commercial complex spanning approximately 7,818.5 square metres of land, with a built-up area of about 975 square metres. It includes a men’s gym, a women’s gym and a hotel building.

    The Al-Rahmaniyah project is an integrated commercial development combining fitness facilities with retail. The asset features men’s and women’s gyms operating alongside an independent commercial zone.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17071628/main.jpg
    Colin Foreman
  • SLB wins $385m contract for Kuwait oil research centre

    2 June 2026

    Schlumberger Oilfield Eastern, a unit of the US-headquartered oilfield services company SLB, has been awarded a KD118m ($385m) contract to develop an oil and gas research centre in Kuwait.

    The contract was awarded by the state-owned upstream operator Kuwait Oil Company (KOC), according to a report by Kuwait’s Al-Rai newspaper.

    The Ahmadi Innovation Valley (AIV) project is planned as an advanced research and innovation hub equipped with specialised facilities and technical teams focused on applied research for Kuwait’s oil and gas sector.

    The contract was awarded after the Higher Purchase Committee (HPC) of Kuwait’s national oil and gas company Kuwait Petroleum Corporation (KPC) determined the bid to be compliant with the project’s technical and commercial requirements.

    In February 2025, KOC signed memorandums of understanding (MoUs) with five international oilfield service companies to support the development of the AIV initiative.

    These companies were:

    • SLB (US)
    • Baker Hughes (US)
    • Weatherford (US)
    • Halliburton (US)
    • National Energy Services Reunited (US)

    Under the preliminary agreements, each of the five companies agreed to establish a world-class research and development centre at the project site, focused on helping KOC meet challenges in the upstream sector.

    KOC’s CEO Ahmad Jaber Al-Eidan had said in February 2025 that the project will enable Kuwait to keep pace with global transformations while investing in advanced technologies to ensure the sector’s sustainability and achieve operational excellence.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17063475/main.gif
    Wil Crisp