CALCUTTA, India, April 21 (UPI) -- The easier bit of "Operation Iraqi Freedom" for India was to drool over potential deals in Iraq that the country could win as part of the large post-war reconstruction planned by the United States.
Over 300 Indian companies that were engaged in business with Iraq when the war broke out, hoped that a significant portion of the estimated $1 billion a week of Iraq's reconstruction expenses would come India's way.
However, while the U.S. Agency for International Development -- USAID -- has announced an expected over $150 billion in reconstruction plans, none of it seems to be coming India's way.
At least not just yet.
Last week, USAID accorded a preferred status to companies of allied countries for undertaking subcontract works in the bombed-out Iraq. India did not figure in this list.
Recently, the agency issued nine solicitations for Iraq reconstruction, for a part of $1.7 billion in reconstruction programs. Out of the nine, four projects have already gone to American companies: Virginia-based International Resources Group; Washington-based Stevedoring Services of America; a North Carolina-based non-profit organization, the Research Triangle Institute; and Creative Associates International Inc., another U.S. entity.
"The program administered by USAID is funded by U.S. taxpayers," the agency said in a statement.
"Revenues from the oil-for-food program, or other Iraqi or international sources have no contribution to these contracts," USAID added
Other contracts in the pipeline are management of humanitarian and trans-shipment operations by air; emergency repair of electrical supply, water and sanitation systems, roads and bridges and public buildings; logistical support, including warehousing, customs clearance, trucking and provision of bottled water; and public health along with Iraq community action programs.
No doubt then, that the country's business community, which was banking on India's political neutrality in this war that it hoped could have given them a head start in bagging a share of Iraq's rebuilding, have started expressing despair.
"It appears unlikely that India could get included in the U.S.'s immediate rebuilding program," sources in industry lobby Confederation of Indian Industry recently said, adding, "this should temper some of the rosy-tinted visions of securing billions in contracts. It could stretch to $200 million at the most."
But whatever comes, is not going to come easy either.
"Since India is not expected to be given any priority by the U.S., it will have to compete aggressively with Malaysia, Indonesia, Thailand, the Philippines and even South Korea for the subcontracting opportunities that will be provided by the American companies," said Sumit Malik, of the Federation on Indian Commerce and Industries.
As it stands now, India sees its biggest gain in the post-war era elsewhere. The end of the war means an end to uncertainty in the Gulf region, which also means the end of India's bloated oil import bills. For India, a return of stability in the Gulf region means a reduction of oil prices from around $38 per barrel to about $28 per barrel, with prospects of it touching $22 by the end of this year.
And, there are no prizes for guessing the magnitude of this benefit for an oil-importing nation like India: a slide of $10 per barrel of oil straightaway translates into savings of 25 percent in the country's oil import bill of around $16 billion a year.
Nevertheless, some Indian companies are undaunted and are pushing hard for Iraq reconstruction contracts. According to sources a few Indian companies have already registered themselves with USAID and have started propagating the country's cost-competitiveness and the fact that Indian companies, on the basis of their prior project-implementation experience in Iraq and proximity to that country, can move in quickly. "Some Indian companies are in a position to move in fairly quickly, which could be beneficial for Iraq, particularly in areas like healthcare," said Raza Siddiqui, of Apollo Hospitals Group.
But others say, to board the post-war reconstruction gravy train, what the country needs to do immediately is to establish diplomatic alliances with the United States-based companies that are likely to be favored by the USAID. "India will need to first position itself appropriately with a mix of economic diplomacy and alliances with multinational bidders," said Vimal Bhandari, a company executive and who is following the post-war developments in Iraq keenly.
That is because, Bhandari said, the race to get a slice of the action is already intense in United States.
For instance, in the last week of March, Rep. Darrell Issa, R-Calif., shot off a letter to Secretary of Defense Donald Rumsfeld and USAID Administrator Ambassador Wendy Chamberlain to prevent U.S. Armed Forces and the U.S. Reconstruction and Civil Affairs Office from deploying a cell-phone system in Iraq based on GSM (Groupe Speciale Mobile), the plowback of which would go to France and other European countries. Instead, Issa urged the Defense Department to opt for the U.S.-developed CDMA technology, which will ensure that dividends from post-war Iraq go to United States companies like Qualcomm.
