Mon, Dec 22, 2003 - Page 6 News List

Poles eager to net lucrative Iraq contracts

JUICY DEALS Officials are somewhat nervous because only one contract has been given by the US to a Polish company, but business remains optimistic of more soon

NY TIMES NEWS SERVICE , WARSAW

As the Pentagon starts handing out contracts to rebuild Iraq's sundered roads, bridges, wells and pipelines, few people are waiting with more impatience than the Poles.

In the view of Poland, which risked the ire of its European neighbors by backing the war, committed troops to the occupation and lost its first soldier last month to a sniper near Baghdad, this is payback time.

While the Polish government cited moral and political reasons for its support of the US, economic motives were never far from the surface. Polish officials freely acknowledge that they hoped that backing a friend in a time of need would translate into more profitable economic ties.

To many here, winning contracts in Iraq is one way to judge whether that bet paid off. Some see it as an ominous sign that Poland has so far netted just one project, a US$7 million telecommunications contract.

"We keep hearing this is such an important alliance, but we've seen little value from it," said Marek Ostrowski, a leading foreign affairs commentator. "We're starting to feel this is a one-way street."

Poland's grievances extend beyond Iraq. Its broader economic ties with the US have languished in recent years. Despite being a populous country in Central Europe, with 39 million people, it ranks 63rd among America's trading partners, behind Jamaica.

The US, once the biggest foreign investor in Poland, has fallen to third place, after France and Germany, as American firms build their auto assembly plants and semiconductor factories elsewhere.

Underscoring the one-way nature of its ties with the US, the Polish government agreed late last year to buy 48 American F-16 fighter jets for about US$3 billion. The contract, which Poland awarded to Lockheed Martin over two European manufacturers, is starting to stir frustration here because of the time it is taking Lockheed to fulfill its promise to steer American investments to Poland to offset the purchase.

"It's not a pretty picture," said Tony Housh, the former director of the American Chamber of Commerce here. "We've got decent investments, but the trade relationship is nowhere near what it should be."

Iraq could be another case of unmet expectations. About 8,000 Polish firms have expressed an interest in projects. Sixteen groups, the biggest names in Polish industry, have been assembled to bid for contracts, which includes US$18.6 billion in American tenders that have been put off-limits to opponents of the war, including France, Germany and Russia. The trouble is, the scale of projects in Iraq may put them out of the reach of all but the biggest Polish contractors. "There are very few Polish companies with that capacity," Housh said.

That has not stopped Yuletide visions of Iraqi bridges and oil wells dancing in the heads of lobbyists and consultants here. Warsaw crackles with gossip about who has the best connections in Washington, and how much those ties might be worth.

"I'm looking for half a billion dollars in 2004," said Victor Boraks, organizer of the best-financed group, which includes Poland's state oil company, a power generation company and an engineering firm. "We have the manpower, we have the capability, we have the experience."

Poland also has a history of work in Iraq: about 40,000 Poles toiled there in the 1970s and 1980s, building more than 200 projects, including roads, bridges and refineries. Boraks said he had the names of 1,000 Poles with experience in Iraq, many of whom speak Arabic.

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