Construction of Baghdad Metro to start in 2020

Iraqi government set to renew memorandum with French-South Korean consortium for the $2.5bln elevated metro

  
Image used for illustrative purpose. Workers are seen at the construction site of the new Weinbergtunnel railway tunnel for Swiss rail operator SBB in Zurich November 26, 2013.

Image used for illustrative purpose. Workers are seen at the construction site of the new Weinbergtunnel railway tunnel for Swiss rail operator SBB in Zurich November 26, 2013.

REUTERS/Arnd Wiegmann

04 April 2019
Construction of the much-delayed Baghdad Metro project by a French-South Korean consortium is scheduled to start in 2020 and is expected to cost $2.5 billion, a top official of Baghdad Provincial Council has said.

Head of the Strategic Planning Committee Nizar Sultan told Thomson Reuters Projects last week that a renewed Memorandum of Understanding (MoU) for the 22-kilometre elevated train project would be signed in April.

In 2018, a consortium of French transport giant Alstom and South Korea's Hyundai had bid for the project with the backing of a soft loan from a consortium of five foreign banks led by Germany's Deutsche Bank. The loan came with a tenor of 19 years, moratorium for the first five years and interest rate ceiling of 2.5 percent.

Sultan said the Alstom-Hyundai consortium had made a formal request to Baghdad's governor in March to extend the previously signed MoU by a further six months since federal and local bodies were unable to complete the draft project implementation contract within the MoU's life span.

He explained that in order to maintain the only financial offer on the table for the project, the stakeholders would need to formally convey to the Deutsche Bank-led consortium that "they are serious about the implementation of the project through the extension of the MoU."

"An initial date of April 15 has been set to sign the memorandum in the presence of high-level officials from the two companies and the ambassadors of France and South Korea," he added.

Alstom had first signed an MoU for the project in January 2011, according to a May 2011 report by Reuters. The 22-kilometre line, with a carrying capacity of 30,000 passengers an hour and 14 stations, would cost $1.5 billion and be funded by the French government and banks, the report said, citing an official statement from the provincial governor's office.

In January 2018, Thomson Reuters Projects had reported that the provincial government, in February 2013, had awarded Alstom a design contract for the first phase of the elevated metro.

Sultan said that Alstom was awarded a $42 million contract by the provincial government to prepare designs for the project. The government had subsequently awarded a $2.5 million contract to a German firm to study these designs.

However, the war on ISIS and low oil prices weakened the financial capacity of the provincial government to implement the project, he said.

He pointed out that the project was highlighted by the previous Iraqi Prime Minister Haidar Al-Abadi during his visit to France In October 2017.

In December 2017, Alstom had said in a press statement that it signed an MOU with the Iraqi government for the development of light rail projects in Baghdad and Basra. The agreement for the 20-km elevated train project in Baghdad, the statement said, includes the supply of rolling stock, electromechanical systems, tracks, and associated civil works.

The light rail system would link Al-Mustansirya, AlShab, Al-Wazyria, Alsarafia AlEtafia bridge, Al-Khadumia, AlMuthana airport and Al-Alawi, the statement added.

"This project would actively contribute to reducing traffic jams in the streets of the capital and reduce pollution," Sultan said, adding that the metro would be extended to connect the western Karkh and eastern Rusafa sides of Baghdad city in the future.

The official also noted that an independent body comprising representatives from the transport ministry, Baghdad municipality and the Provincial Council is being set up to manage the project's implementation and operation and for better coordination between the stakeholders.

(Reporting by Majda Muhsen; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)


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