PARIS (Dow Jones)--Alarmed by reports that the Bush administration wants to
award the lion's share of Iraqi reconstruction contracts to U.S. companies, the
French are laying out a plan to join the post-war fray by leveraging their
long-standing ties to Iraq.
France's finance ministry and the country's largest business federation,
Medef, have set up a joint working group to determine how French companies can
wrest lucrative contracts from American firms to rebuild Iraq after the war.
France's government is determined that French companies be part of the
rebuilding of a post-Saddam Hussein Iraq even though President Jacques Chirac
led the diplomatic opposition to the war, people familiar with the plan said.
"France is opposed to war but intends to fully participate in the
reconstruction" of Iraq, said a spokesman for the French finance ministry.
The purpose of the informal working group is "to be ready when the time comes
and see what resources can be mobilized." A person close to the Medef said:
"The group's role, with a staff of around ten, is to see how French companies
could get back into Baghdad."
The Bush administration's current reconstruction plan, details of which have
leaked over the past two weeks, would award more than $1.5 billion in Iraq work
to private U.S. companies, sidelining United Nations development agencies,
other multilateral organizations and big nongovernmental organizations.
European officials have reacted angrily to the plan, charging that efforts to
keep the U.N. and non-U.S. contractors on the sidelines will delay
reconstruction in Iraq and stir deeper ill will toward Washington.
Last week, Chirac said France would veto any U.N. resolution attempting to
"give the American and British belligerents the right to administer Iraq."
Building on decades of close relationships between Paris and Baghdad - French
firms built the Iraqi capital's current sewer and phone systems in the early
1980s - French companies have established themselves as the largest suppliers
of goods to Iraq since the U.N. trade embargo was partially lifted in 1996.
In 2001, France exported 660 million euros worth of goods to Iraq. As part of
the U.N.'s now-frozen oil-for-food program, French telecom equipment supplier
Alcatel SA (ALA) clinched a $75 million contract to upgrade Baghdad's phone
network, and French car maker Renault SA F.RNA) sold another $75 million worth
of tractors and farming vehicles to the Iraqi state.
The French company that has perhaps the most at stake is oil major
TotalFinaElf SA (TOT), which spent six years in the 1990s doing preparatory
work on the giant Majnoon and Bin Umar oil fields. Total hopes that that
groundwork will pay off when the contracts to operate those two Iraqi fields
are awarded.
-By David Gauthier-Villars and John Carreyrou, Dow Jones Newswires; 33 (0)1 40
1717 40,
david.gauthier-villars@dowjones.com
