Cash-strapped Iraq is planning to pay nearly half of its 1.8 trillion Iraqi dinars ($1.5 billion) debt to contractors for projects they have executed over the past years, the OPEC member's Planning Minister was reported on Monday as saying.

Khalid Al-Najm said OPEC's second largest oil exporter has paid large sums in outstanding dues to local and foreign contractors over the past years and intends to make another payment shortly.

"The government still owes contractors around 1.8 trillion dinars...we intend to pay almost 50 percent of that debt to the contractors soon," he told the official Iraqi news agency.

In 2018, Iraq approved nearly 1.6 trillion dinars ($1.35 billion) of the state budget for payment of long-standing debt to contractors.

The arrears to farmers and contractors had previously been estimated at over $6.4 billion but they were massively revised down in 2018 after state auditors discovered thousands of submitted applications submitted were either forged or overestimated.

Najm warned that Iraq, which controls the world's 5th largest proven oil deposits, needs nearly 136 trillion dinars ($114 trillion) to revive stalled and delayed projects or most of them will "either be stopped or cancelled."

(Writing by Nadim Kawach; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2020