ERBIL, Kurdistan Region - War with the Islamic State (ISIS) and the coincident financial crises have impeded the implementation of nearly 3,500 investment projects in the Kurdistan Region, the head of the Region’s contractors union said Saturday, underlining outstanding debts by the Kurdistan Regional Government (KRG) for completed projects.
“In 2014 all projects came to a halt” after they obtained permits, Rizgar Jamal told Rudaw’s Agrin Mohammedi.
“However, after the government deemed some of the projects important and necessary to complete, it asked contractors to resume work,” he added, noting that some contractors responded to the KRG’s request and accordingly “around 100 to 200 projects” have been completed while around 3,400 are stalled.
Baghdad had cut Erbil’s budget share in early 2014, accusing it of violating constitutional provisions by exporting oil independently from the State Organization for Marketing Oil (SOMO) to Turkey. Since then, the federal government has not disbursed the KRG’s budget shares for investment expenditures.
Erbil’s financial crisis was further exacerbated when ISIS launched a massive campaign in Iraq later that year, seizing significant territories in central and northern provinces. The KRG had swiftly shifted its financial priorities to fund defense lines across nearly 1,000 kilometers-long border with the terror group.
Consequently, the KRG’s total public debt and financial liabilities have exceeded $27 billion, including unpaid civil servants’ salaries, outstanding debts of the international oil companies, and domestic contractors.
"Dozens of projects have stopped and their work is stalled. Around $100 million owed to contractors of these new projects is still held by the KRG,” Jamal said.
Separately, Rasti Fazil, the deputy head of the Kurdistan Contractors Union’s Erbil branch, told Rudaw that “around 155 projects have been stalled since 2023, and since then, about 43 billion dinars [around $33 million] owed to them remains unpaid by the KRG.”
According to Fazil, dozens of investors have gone bankrupt and suffered major losses because they were forced to set their projects aside or complete them through debt.
Alan Karim, the head of the union’s Sulaimani branch, noted that roughly 1,000 projects remain unfinished in the province and the Halabja province since 2014.
Expressing contractors' despair over receiving their payments, Karim added: "We do not have exact figures on how much money is owed to contractors in the Sulaimani area because investors are no longer pursuing their funds and lack confidence that the government will repay them."
Meanwhile, Duhok’s branch of the contractors union said the majority of the projects - mostly permitted in 2023 - have been completed despite the inability of the KRG to disburse financial dues to contractors.
Zirak Doski said that the government owes about 185 billion dinars [around $141 million] to contractors in the province.
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