VZCZCXRO4543
RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #0184/01 0251409
ZNR UUUUU ZZH
R 251409Z JAN 09
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 1375
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS SECTION 01 OF 02 BAGHDAD 000184 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD EFIN EINV IZ
SUBJECT: DHI QAR PRT: PIC IMPROVES BUT NOT QUITE THERE 
 
SENSITIVE BUT UNCLASSIFIED.  PLEASE PROTECT ACCORDINGLY. 
 
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Summary 
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¶1.  (U) Under charismatic leadership, the Dhi Qar Provincial 
Investment Commission (PIC) scores some victories but lacks the 
strategic planning, organization and professionalism to reach its 
lofty goals.  END SUMMARY. 
 
-------------------------------- 
How Not to Build an Organization 
-------------------------------- 
 
¶2.  (SBU) Dr. Ismail Radhi serves as the PIC Chairman in Dhi Qar. He 
has close ties to Governor Aziz Alwan (ISCI) and most likely holds a 
second paid position as an advisor in the Governorate.  While this 
may be contrary to the National Investment Law, Dr. Ismail remains 
an excellent and motivated contact of the PRT.  He welcomes 
engagements and has noted the shortcomings of the PIC and the 
business community in Dhi Qar.  In particular he has asked for 
technical training on project management, investment, planning, and 
organization. 
 
¶3.  (SBU) In our early engagements with the PIC it was clear that 
there was an initial euphoria at the amount of resources allocated 
for operations. The PIC immediately hired 90 staff members. Dr. 
Ismail acknowledged that once the staff members were on board, then 
they began to think about how the PIC should be organized based on 
the skill sets their employees brought to the table. The result is a 
disjointed organization that has managed to produce some basic 
marketing materials with the help of the National Investment 
Commission (NIC) but otherwise remains rudderless. 
 
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Success Stories? 
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¶4.  (SBU) The Dhi Qar PIC has scored some successes such as 
agreements on housing developments. More frequently though details 
about agreements are usually scarce and results exaggerated. One 
such example was the alleged agreement signed between the Dhi Qar 
PIC and the Turkish investment group OSTIM on December 31, 2008. The 
media picked up the story as an unmitigated success that would bring 
in 8 billion USD over five years to develop an industrial city just 
south of Nasiriyah. From subsequent discussions with the PIC 
Chairman it appears that what was signed was a memorandum of 
understanding on protocols regarding how OSTIM would engage with the 
PIC in the future. While this is a positive development, it is only 
the beginning, not the crowning achievement as originally 
advertised. 
 
¶5.  (SBU) What was advertised as another success story was an 
Iranian investment to build a cement factory in western Dhi Qar. 
Originally thought to be a done deal, the investor has failed to 
obtain the required credit certificates and the deal remains on 
indefinite hold. 
 
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Oil Coordination 
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¶5.  (SBU) The PIC clearly has an interest in playing a role in the 
development of Dhi QarQs oil sector. They presented the PRT with 
flow charts on investment opportunities in refineries and oil field 
exploitation. While the flow charts showed a high level of 
coordination between the various line ministries to include oil, 
finance and planning, the PIC Chairman was unaware of developments 
such as the Front End Engineering and Design (FEED) award recently 
made by the Ministry of Oil for a 300,000 bpd refinery in Nasiriyah. 
 The Chairman also did not mention the recent bids from Italy's Eni 
SpA, Spain's Repsol and Japan's Nippon Oil for an oil services 
contract in Dhi Qar. This leads the PRT to believe that the PIC is 
largely out of the loop with regards to decisions being made by the 
Ministry of Oil in Baghdad. 
 
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Pipe Dreams 
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¶6.  (SBU) The Provincial Government in Dhi Qar repeats three major 
Q6.  (SBU) The Provincial Government in Dhi Qar repeats three major 
ideas each involving large sums of investment. These are not new 
ideas and have been shopped around to investors and Coalition Forces 
for years. Unfortunately the Provincial Government has yet to come 
up with firm proposals or market research on any of them. These 
ideas include a Civilian Air Terminal at Tallil Air Base, a 
Touristic City of Ur and an Industrial City 12 km south of 
Nasiriyah. The air terminal proposal has allegedly received some 
funding from the central government to conduct an initial viability 
study, but PRT has received no updates. The PIC has hosted 
 
BAGHDAD 00000184  002 OF 002 
 
 
international investors with regard to a touristic city based on the 
archeological sites at Ur. Similar to ideas bubbling in other 
provinces this would include five-star hotels and massive 
infrastructure development. Again, no real studies or plans have 
been conducted. The third big dream is the industrial city mentioned 
above. The big-ideas are there; the means to get the ideas on paper 
in a way that can be implemented is not. 
 
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Comment 
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¶9.  (SBU) The PIC revolves around Dr. Ismail as the Chairman, who 
acts as directed by Governor Aziz. Contacts at every other level 
with the PIC have proven fruitless. While the PIC has made some 
progress, thanks to the NIC and Iraq-wide training initiatives, they 
have requested more targeted efforts as they recognize they are not 
at the same level, nor do they have the same investment 
opportunities, as Karbala or Najaf. PRT welcomes the MND-C funded 
initiative to bring an expert consultant to Dhi Qar with a Bilingual 
Bicultural Advisor to work directly with the PIC. The expert will 
need daily access to the PIC, a strong familiarity with the National 
Investment Law and not be over-encumbered by security requirements. 
END COMMENT. 
 
CROCKER