OPEC member Iraq has resolved a 4-month financial dispute with the South Korean Daewoo company which has threatened to quit the $multi-billion project, an Iraqi official was quoted on Sunday as saying.

Farhan Al-Fartoosi, Director General of the General Company for Ports in Iraq, an affiliate of the Transport Ministry, said the rift ended after the contract was modified.

"We have renewed the contract with Daewoo after it was modified...we have managed to reduce the contract's value by around $25 million after the Company agreed to undertake some small Faw projects free," he told Shafaq news agency.

Fartoosi did not provide details of the new agreement but said Daewoo would now complete the project on time. He said Iraq has not received any offer from the China Machinery Engineering Corp (CMEC) which was approached by the Transport Ministry for possibly replacing Daewoo in case negotiations fail.

Iraq awarded a $2.73-billion contract to Daewoo three years ago for the construction breakwaters at the Faw Port and officials said in October the firm had managed to complete most of the project.

But a rift erupted when Daewoo demanded an increase in the contract value to $2.8 billion after the Iraqi Transport Ministry asked for additional work.

Located in South Iraq, Faw Port will have a capacity to handle 99 million tonnes annually. It comprises a 39km container quay and two km of berths along with a container warehouse and hinterland covering more than one million square metres.

The project, one of the world's largest container terminals, was launched in 2010 but was blocked by cash shortages due to internal hostilities and low oil prices.

(Writing by Nadim Kawach; Editing by Anoop Menon)


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