Aspects of corruption in Iraq are various and complex and its arms has worsened and become numerous to be turned from the corruption of individuals to the corruption of institutions , which led to the deterioration of the country ‘s economy and drain the state budget , and this affects the standard of living of the citizen to increases the poverty of the poor and increase the wealth of the corrupt .
The latest chapters of the continuing corruption is the Basmaja residential project on which reliable information obtained by the Rawabet center for Research and Strategic Studies to confirm approval of lending of government banks (Rafidain and Rasheed , Trade Bank of Iraq) to project of Basmaja by 600 billion new Iraqi dinars, and this is contrary to the law of investment and trespassing to the public money and a waste of the state treasury , this lending came following to the loan of two billion dollars the company has got it at the beginning of the project at the era of the former prime minister Nuri al – Maliki.
The question arises: Why do they approve lending the company again, even though she had not paid back till this moment any part of the first loan that it got it in 2012 ? and which is the entity responsible for granting lending to investment project that the executing company is supposed to spend on it from its own money, and not from government bank loans ?, who is behind the corruption concerning the approval of the loan? this is what should be disclosed by the integrity Committee, and transfer it to the judiciary; to stop the series of corruption by looting of public money by influential looters , and beneficiaries .
The Parliamentary Integrity Commission member Mishan al – Jubouri revealed in a television interview (13 / February / 2016 , link below the article) for part of the corruption of Basmaja residential file, saying that the financing of the project by two billion dollars is illegal because it is an investment project, not a contract, and it hides a deal of corruption behind it , if we follow the movement of two billion , we will know that it had been transferred to South Korea immediately?
al – Jubouri wondered : Is it reasonable to finance the investment project from the state? And the money has not transferred , that has not already spent legally , to the country of the investing company? And who is the influential corrupt entity in the Iraqi state that facilitated the fraud process and the smuggling of two billion to South Korea to the accounts of the smugglers and stressed that the Committees of integrity and Board of Supreme Audit ( BSA ), to reveal the facts of this dangerous file, and to stop circumventing on the investment laws and the waste of public money.
“Since the beginning of Basmaja residential project and suspicions hovering around it , ” This is shown by a member of the Economic and Investment Committee Nora Salem, in an interview through al-Taghier channel , speaking about the corruption of the project and the mystery that revolves around it .
She stressed that the economic and investment committee in Parliament has not seen the project contract, and when the contract was requested , it was sent after a long period in secret and personal way! Noting that sending a very huge project of contract in this way raises doubts and questions; as “the project turned from investment to contracting after the government’s participation in it through the allocation of two billion dollars, and in particular the companies participated to the project are essentially” lagging behind “in previous projects and suspicions of corruption hovering around it.
Salim stressed that ” the company wanted to withdraw from the project for lack of sufficient funds to have, but Maliki ‘s government has supported the project to instruct banks to lend to the company two billion dollars.
And Dr. Abdullah al – Jubouri / deputy for the Iraqi coalition revealed to al-taghier channel , that the area of the project was presented as 8,000 acres and turned out to be 6, 700 acres only, and the orchards surrounding the area were taken from the peasants without compensating them to create a big problem , the migration of peasants and commit an aggression on their rights and according to the law , they must be compensated, and the Korean company acquired the land for the project free of charge, demanding from the Iraqi state to cover infrastructure with Iraqi funds and this a great disaster .
Al- Jubouri added that there was a technical corruption in addition to the the financial side that the land did not subject to Geological Survey, an area close to the nuclear reactor where the contaminated radiation was too much, and it was supposed that the project to have approvals from 12 government departments then the approval about the suitability of the land to live or not , and that did not happen .
The Integrity Committee member Jawad Alshahyla said that it is supposed the state to contribute with the loan charged for the citizen with an interest rate of 3% and the government bears 3%, but it has happened here that the government took out 4% of the state budget instead of 3%, which means that there is a ratio of 1% estimated by $ 750 million lost a month, where the money went and where spent? This indicates that there are influential and whales and brokers manipulating with money of Iraqis, and stand behind the project, which calls for the Integrity Commission , which owns all the project files to open an investigation of the circumstances of Basmaja residential project that is raising doubt and controversy.
According to official sources, the “tender raised with a ceiling to spend no more than $ 500 to build per square meter with the infrastructure within Basmajh Complex, The Korean company made to implement the project at a lower cost than the cost involved, it offered to build one meter to $ 450,” and ” The Curious It is that the contract had been awarded to them at a cost of $ 630 per square meter, an increase of $ 130 for the exact amount of the Iraqi government, and then added $ 100 claimed to improve social status, and added $ 210 for obscure reasons, so the cost per square meter has become $ 940 instead of 500. ”
it was revealed that ” the Korean company received before it place one brick of 25% of the project value, equivalent to about two billion dollars, and although it is still lagging behind in the achievement.”
And indicated of pressures exerted on the company after signing the contract with it to enter a secondary partner as a contractor for infrastructure works pointing out that some of officials threatened the company to withdraw the contract from it in the event of its refusal and this is an evidence of hidden corruption of the project that they wanted through the Korean company to loot the state money making use of their influential locations and their parties .
And the National Alliance MP Ali al – Badri , revealed that ” a number of companies met in Basmaja project that suspicions of corruption are hovering around it and delay in its work , ” pointing out that ” the project has become a meeting place and gathering point for those companies.”
And al – Badri charged the Ministry of Planning ” with the responsibility for this matter , ” stressing “that the ministry has to put the lagging company in the black list, so do not give it future projects.”
The former member of the Parliamentary Integrity Committee Jawad Alshahyla revealed in (12 / September / 2012), that $ 7 billion was under the trusteeship of the National Investment Commission that a quarter of it was awarded to the Korean company. This is contrary to the fact that the contract of the company was an investment contracts, but in this case the contract is not an investment after it has been providing this amount from Rafidain and Rasheed banks , adding that the Iraqi government bore the burden of publicity and promotion.
MP / National Alliance / Adnan Jabbar al- Mayahi surprised that the former Governor of Baghdad Salah Abdul Razzaq to make this project as a part of his achievements and his electoral program , stressing that ” the investment process in the country is still at a standstill , and most of the projects awarded by the National Investment Commission lagging behind and the best proof of that the Basmaja residential project that the beginnings were not encouraging from the planning and implementation aspect , “he said.
The Korean media said that ” the Korean authorities jailed for nine years on the head of Hanwha Corporation , ” Kim Sung – Yun, ” on charges of embezzlement and breach of trust.”
and added” The public prosecutors in South Korea called for a fine of $ 142 million on the head of the company, because of the use of the company ‘s assets and sold shares from its subsidiaries, for his family members at prices lower than the market, in addition to that he was working under false names.”
The question that comes in the mind , has the project withdrawn from this company after the corruption scandal, and how to give millions of dollars to a company that its owner accused of corruption and sentenced? And where are the positions of Iraqi government and the Iraqi investment and the Integrity Commission and its role to shed light on such corrupt companies and those who are behind and support it for the causes of corruption by wasting money of the state under the pretext of residential complexes that eliminate the housing crisis.
and the project is facing the problem of how to pay the Korean company in the absence of decline of buying interest , even though spending on campaign of marketing and millions wasted on advertising campaigns , which was expected to reap 25% of the project (2 billion dollars), creating a major funding crisis, forced former prime minister to issue , at each batch due to the Korean Hanwha company , a decision from the Council of Ministers to obligate the Rafidain and Rasheed banks to finance these payments.
Amember of the Parliamentary Integrity Committee “Juma Diwan” says that the signed project between the Iraqi government and the executed Korean company “,” the value of the contract , amounting to ten billion dollars is a tremendous and not commensurate with the project that it can accomplish more than a hundred thousand residential units, noting that the company actually received from it two billion dollar. ”
Diwan continues , “if we consider that all project apartments with an area of 140 square meters, the price of 84 million dinars, the cost of the project will be eight billion and $ 400 million with a full – service, noting that according to the investment law the Korean company should be abide by to ensure secure services , health centers, schools and police centers , and it was necessary to be part of the contract and carried out by the Korean company. ” and the Diwan indicates that the government entrusted al-Rafidain and Rasheed banks and Trade Bank of Iraq to fund part of the project that constitutes a breach to the investment law pointing out the investment means to provide the investor with a land to undertake the responsibility of providing the necessary requirements without charging the governments any obligations.
While the Parliamentary Integrity Commission has shown, that there are a lot of “suspicions of corruption” on the contract f project , including the previous government ‘s accusation as “implicated” the Central Bank and the Rafidain and Rasheed banks, where ,despite that ” it is not its right.”
The solution to the problem of Basmaja housing project, the Integrity Committee has to undertake the responsibility for the disclosure and accountability of financial corruption, and return the money that bellowed from the state budget, dealing with the problem with transparency and clarity and create a healthy climate to attract foreign investments and to contribute to push the development process forward.
Shatha Khalil
Unit Economic Studies
Translated by Mudhaffar al-Kusairi
Sources:
Writings
Alsumaria News
Rawabet Center for Research and Strategic Studies