Foreign Investment Projects in Kurdistan Snarled in Delays,
Posted: Mon Jul 15, 2013 4:33 pmERBIL, Kurdistan Region – Since the Kurdistan Region began allowing foreign investments in 2006, only 21 percent of signed projects had been completed by the end of last year, according to data from the autonomous Kurdistan Region’s Board of Investments (BOI).
Up until the end of 2012, Erbil had 244 licensed projects and out of those projects only 52 were completed since the end of 2006, according to the BOI Erbil Branch.
This means Erbil has completed a total of 21 percent of its investment projects at a rate of 10 per year.
“The BOI does not deny there are delayed projects, but these issues relate to land disputes and the BOI can’t comment on individual cases,” said a BOI official who did not want to be identified.
“It takes projects time to be completed and you can’t expect projects licensed in the early years to be completed in one or two years,” the official added.
In 2006, the Kurdistan Regional Government (KRG) passed the Investment Law to entice foreign investors, by allowing 10-year tax breaks and certain land rights.
Since then, 552 licensed projects have been approved by the BOI throughout the region, according to the BOI’s list of licensed projects.
Erbil takes the lion’s share with 258, Duhok has 140 and Sulaimani has 154.
But when the BOI’s main Erbil office was asked by Rudaw to provide project timetables and studies, it said it did not have the information for Duhok and Sulaimani; it said the data for Erbil could not be divulged for legal issues.
In effect, It has been seven years since the investment law was passed and the main central BOI office has no information about foreign investment projects in other cities for which it is supposed to be the main governing body.
In an Investment Climate report for 2013, the US Department of State said, “Investors in the IKR (Iraqi Kurdistan Region) face many of the same challenges as investors elsewhere in Iraq, including corruption, red tape and inefficiency.”
In 2007 alone, there are 12 projects which have yet to be completed – some have not even started -- out of the 29 licensed that year for the capital, according to BOI data.
This means that out of all the projects licensed in 2007 for Erbil, the completion for that year stands at 58.4 percent.
In 2008, 31 projects were licensed and given land and tax breaks by the BOI. Out of those, 31 – or only nine percent – were finished by the end of 2012. This means that, out of the projects licensed in 2008, the BOI had only completed 29 percent, with more than 70 percent of the projects remaining.
Licensed projects in 2009 stand at 10 completed projects out of 40, leaving a 25 percent completion rate.
And in 2010, only 13 projects from that year have been completed out of 67 -- a 19.5 percent completion rate.
The framework of the Investment Law instructs that the BOI must work through other KRG ministries and municipalities to agree on land permits and other issues prior to issuing licenses and beginning construction.
The BOI is given the power to exhaustively study all investment projects through timetables, feasibility studies and land studies.
“There is also the criteria, that before starting the building they submit the master plan and the detailed plans to the related ministry and they get the approval from them and BOI supervises the implementation,” said Kamaran Mafti, director general for promotions, assessment and licensing of projects at the BOI.
Despite this, the BOI cited the very issues it is supposed to resolve, in accordance with the law, as the major delay behind already licensed projects. Mafti said various projects often hit problems within municipalities and other issues as they are developed because of land disputes.
Up until the end of 2012, Erbil had 244 licensed projects and out of those projects only 52 were completed since the end of 2006, according to the BOI Erbil Branch.
This means Erbil has completed a total of 21 percent of its investment projects at a rate of 10 per year.
“The BOI does not deny there are delayed projects, but these issues relate to land disputes and the BOI can’t comment on individual cases,” said a BOI official who did not want to be identified.
“It takes projects time to be completed and you can’t expect projects licensed in the early years to be completed in one or two years,” the official added.
In 2006, the Kurdistan Regional Government (KRG) passed the Investment Law to entice foreign investors, by allowing 10-year tax breaks and certain land rights.
Since then, 552 licensed projects have been approved by the BOI throughout the region, according to the BOI’s list of licensed projects.
Erbil takes the lion’s share with 258, Duhok has 140 and Sulaimani has 154.
But when the BOI’s main Erbil office was asked by Rudaw to provide project timetables and studies, it said it did not have the information for Duhok and Sulaimani; it said the data for Erbil could not be divulged for legal issues.
In effect, It has been seven years since the investment law was passed and the main central BOI office has no information about foreign investment projects in other cities for which it is supposed to be the main governing body.
In an Investment Climate report for 2013, the US Department of State said, “Investors in the IKR (Iraqi Kurdistan Region) face many of the same challenges as investors elsewhere in Iraq, including corruption, red tape and inefficiency.”
In 2007 alone, there are 12 projects which have yet to be completed – some have not even started -- out of the 29 licensed that year for the capital, according to BOI data.
This means that out of all the projects licensed in 2007 for Erbil, the completion for that year stands at 58.4 percent.
In 2008, 31 projects were licensed and given land and tax breaks by the BOI. Out of those, 31 – or only nine percent – were finished by the end of 2012. This means that, out of the projects licensed in 2008, the BOI had only completed 29 percent, with more than 70 percent of the projects remaining.
Licensed projects in 2009 stand at 10 completed projects out of 40, leaving a 25 percent completion rate.
And in 2010, only 13 projects from that year have been completed out of 67 -- a 19.5 percent completion rate.
The framework of the Investment Law instructs that the BOI must work through other KRG ministries and municipalities to agree on land permits and other issues prior to issuing licenses and beginning construction.
The BOI is given the power to exhaustively study all investment projects through timetables, feasibility studies and land studies.
“There is also the criteria, that before starting the building they submit the master plan and the detailed plans to the related ministry and they get the approval from them and BOI supervises the implementation,” said Kamaran Mafti, director general for promotions, assessment and licensing of projects at the BOI.
Despite this, the BOI cited the very issues it is supposed to resolve, in accordance with the law, as the major delay behind already licensed projects. Mafti said various projects often hit problems within municipalities and other issues as they are developed because of land disputes.