VZCZCXRO0860
RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #2102/01 1891101
ZNR UUUUU ZZH
R 071101Z JUL 08
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 8179
INFO RUCNRAQ/IRAQ COLLECTIVE
RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL//CCJ2//
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS SECTION 01 OF 02 BAGHDAD 002102 
 
SENSITIVE 
SIPDIS 
 
DOD FOR TFBSO 
 
E.O. 12958: N/A 
TAGS: ENRG PGOV EPET EINV EAID MARR PINR IZ
SUBJECT: NINEWA-SALAH AD DIN BORDER AREA DEPRESSED BUT HAS 
POTENTIAL 
 
REF: BAGHDAD 2052 
 
¶1. (U) This is a Ninewa Provincial Reconstruction Team (PRT) 
message, in cooperation with the Salah ad Din PRT. 
 
Summary 
------- 
 
¶2. (SBU) Southern Ninewa Province and the Sharqat district in 
northern Salah ad Din Province suffer from lack of 
infrastructure investment and unemployment of at least 50 
percent.  This area, collectively known as the Zaab Triangle 
of the Tigris River Valley, would benefit from GOI 
infrastructure investments that provide long-term employment 
and create an attractive environment for private investment. 
The presence of three potentially major industrial facilities 
(a sulfur plant in need of refurbishment, an unfinished 
electrical generation station and a currently producing oil 
refinery) represents a solid economic base.  The location of 
the region along the main road from Baghdad to Mosul on the 
banks of the Tigris favors industrial, transportation and 
agricultural development.  The PRT is working with willing 
local leaders to harness the region's multiple economic 
benefits and collectively improve energy, water and 
transportation development across tribal and sectarian lines. 
 National investment in the region's infrastructure and 
naturally profitable service- and construction-oriented 
industries would help set up the region for long-term growth. 
 
Depressed Zaab Triangle Has Potential 
------------------------------------- 
 
¶3. (SBU) PRT Ninewa's southern Branch Office, out of Forward 
Operating Base QWest, covers the southernmost part of Ninewa 
and, in collaboration with Salah ad Din PRT, the northernmost 
Salah ad Din district of Sharqat, including areas on both the 
eastern and western sides of the Tigris River.  Most of the 
region's inhabitants on the western side of the Tigris are 
Sunni Bedouin, while the majority in Ninewa's Makhmour 
district on the eastern side of the river are Kurdish.  The 
entire region suffers from dilapidated transportation and 
energy infrastructure exacerbated by slow and inefficient 
budget execution.  The security situation has improved over 
the past year although terrorist and criminal activities 
still disrupt daily life. 
 
¶4. (SBU) Major industries are the Mishraq Sulfur Plant, 
destroyed by fire in 2003 (reftel), the Al Shemal thermal 
electrical generation plant, unfinished and paying storage 
fees in the United Kingdom for Rolls-Royce generators 
purchased fifteen years ago, and the Qayyarah Refinery, which 
produces asphalt from the heavy crude oil found in the region 
and has recently added another line to produce benzene. 
These state-owned facilities represent the potential for a 
strong economic base should they be repaired, restored, 
finished and brought to full production.  On the northern 
margins of this region, the Hammam al Alil cement plant, 15 
miles south of Mosul, profitably churns out cement for the 
booming central and eastern Ninewa construction industry. 
 
¶5. (SBU) Beyond the state-owned factories, the province's 
economic activity currently depends on central government 
financing of capital projects.  Local officials complain 
about inefficiency in this budget execution process, citing 
delays in repairs to several Tigris bridges that are needed 
to boost intra-regional commerce.  Because budgets rarely 
include funding or expertise for operations and maintenance, 
the little capital investment that does occur quickly decays, 
as seen in a broken-down water station that left 50,000 
Sharqat residents without full water supply. 
 
¶6. (SBU) There is currently little legitimate private sector 
activity with growth potential in this area.  Private sector 
economic activity has consisted mostly of involvement in 
stolen fuel marketing and transportation.  Decrepit 
infrastructure, continued security concerns and the lack of a 
fully functioning banking system discourage local and 
international investment.  Current construction industry 
activity in Zaab Triangle is limited to private houses for 
the well-off, with the shortage of credit or GOI investment 
hindering both small and medium-sized business development. 
 
¶7. (SBU) Like the rest of northern Iraq, the lengthy drought 
has reduced agricultural productivity to - at best - a low 
subsistence level.  While the current level of agricultural 
production does not support agricultural processing, the area 
would be ideally suited to use its strategic location, 
 
BAGHDAD 00002102  002 OF 002 
 
 
available water and potential power to process profitably 
local agricultural products.  Improved irrigation would help 
resolve some of the drought-induced issues and provide a 
local demand for grain processing.  Grain from local silos is 
currently sent to Erbil for grinding. 
 
¶8. (SBU) The recent GOI attention on Mosul - mainly through 
Prime Minister al Maliki's special advisor Zuhair Chalabi - 
has led to hopefulness from local officials that investment 
and budget execution will improve.  The GOI's promises to 
execute the budget more efficiently, add supplemental budget 
funds and focus efforts on the electric grid and 
infrastructure in general have encouraged the region's 
inhabitants to begin stockpiling construction materials and 
amass funds for small businesses. 
 
Comment 
------- 
 
¶9. (SBU) Two initiatives would directly assist the Zaab 
Triangle's economic situation: efficient distribution of 
Ninewa and Salah ad Din provincial budget funds for 
infrastructure and targeted industrial rehabilitation 
projects.  First, GOI-funded infrastructure reconstruction 
and maintenance projects would improve transportation and 
power networks, while pushing more cash into the local 
economy.  Politically, local implementation of these 
infrastructure projects would dovetail with ongoing, 
PRT-supported municipal efforts to organize local utility 
districts to fill gaps in national service provision.  Water 
management improvements and drought countermeasures, now 
under study by PRT, would help revive the agricultural sector 
and provide immediate, low-skilled employment. 
 
¶10. (SBU) Second, targeted investment in the underperforming 
Mishraq Sulfur Plant, Al Shemal power plant and Qayyarah 
refinery would provide construction and maintenance jobs in 
the short term while setting up the region for sustainable 
long-term growth.  The sulfur plant sits on the world's 
largest natural reserve of sulfur and requires only $100 
million to be fully functional (see details reftel).  The Al 
Shemal power plant's original generation design may now be 
outdated, but the existing location's shell could be 
exploited to bring state-of-the-art generation to the region 
more quickly than building a completely new plant for the 
ground up.  An increase in dedicated power for the Qayyarah 
refinery would assist that plant's output of much-needed 
asphalt for local road reconstruction projects. 
 
CROCKER