State contracts in dinars and the National Day holiday…the most prominent decisions of the Iraqi government

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State contracts in dinars and the National Day holiday…the most prominent decisions of the Iraqi government

Prime Minister Muhammad Shiaa Al-Sudani chaired the thirtieth-ninth regular session of the Council of Ministers. During the session, participants discussed the current situation in the country, followed up on the implementation of files related to various national issues, and reviewed the progress of the government program’s priorities. They also discussed the topics on the agenda and issued decisions and recommendations related to them.

To celebrate the National Day of the Republic of Iraq, the Prime Minister has instructed suspending official working hours on Tuesday, October 3, 2023, in all ministries and state institutions. The Prime Minister’s Media Office made this announcement in a statement.

As part of their ongoing efforts to improve financial and administrative processes, the Council of Ministers has decided to ensure that all contracts within Iraq will be conducted in Iraqi dinars. The only exception to this rule will be contracts that are opened by an external documentary credit, which will be valued according to the agreement between the two parties but only up to the value of the documentary credit.

The Council has instructed the Ministry of Planning to take inventory of all the previous state contracts that were contracted in US dollars, except for those that had an external documentary credit, and create a table of them. This table will be sent to the Ministry of Finance and the Central Bank, along with the amounts of these contracts due. The Ministry of Planning will determine the limit for the highest monthly amount that the Central Bank must cover in US dollars based on the receivables received from the contracting parties. The Central Bank will cover these receivables at an exchange rate of 1320 dinars per US dollar. The amount will be deposited in the Ministry of Finance’s account to cover monthly payments for these contracts. The payments will be made according to work arms and exchange release orders that meet release controls.

The Council of Ministers has directed Iraqi government banks, including the Iraqi Trade Bank, to repay their loans in US dollars at an exchange rate of 1,320 dinars for every US dollar borrowed. This is applicable only to loans that were granted before the issuance of this directive. The Central Bank will cover these loans in US dollars, and the lending banks will receive the payment accordingly.

At a recent meeting, the Council of Ministers approved a recommendation made by the Ministerial Council for the Economy (230204 Q). The recommendation included a decision to defer the Ministry of Transport’s dues for flooring fees and fines that had been incurred by the General Iron and Steel Company. The payment of these dues will be made only after the factories of the General Iron and Steel Company are operational. Additionally, the Ministry of Transport/General Company for Ports of Iraq will take all necessary steps with beneficiary parties and establish an effective mechanism to ensure the prompt removal of goods from the ports to avoid delays and any potential fines or floor fees.

The Council is keeping an eye on the energy sector to ensure reforms, development and efficient use of gas resources. Recently, the Council of Ministers approved the proposal of the Ministerial Council for Energy (23083 of 2023) to implement a gas gathering and compression project in the Nasiriyah oil field.

It was decided to approve the recommendation of the Central Committee for Review and Approval of Referrals in the Ministry of Oil during their session on August 6, 2023. The decision pertained to the request made by Dhi Qar Oil Company, which is one of the companies of the Ministry of Oil, to approve the referral of the Nasiriyah oil field’s gas gathering and compression project. The said project is under the coalition’s custody, which includes Oil Projects Company, Ministry of Oil, and Italian PEG. The total cost of the project is estimated to be $272 million, which is 7.3% higher than the estimated cost mentioned in Dhi Qar Oil Company’s letter dated July 26, 2023.

Iraqi-Jordanian electrical interconnection project

The Council of Ministers has approved amendments to the Iraqi-Jordanian electrical interconnection project’s sales contract. These changes were proposed in a letter from the Ministry of Electricity dated September 4, 2023, and involve renewing the contract to accommodate new equipment and updating the terms and conditions. However, the price equation in the energy sale contract will remain unchanged. Under the contract, the National Electricity Company in Jordan will sell electrical energy to the General Electric Power Transmission Company – Central Region / Ministry of Electricity in Iraq for a period of three years after the connection is established, at a voltage of 400 kV between the Al-Risha transformer stations in Jordan and the Al-Qaim transformer station in Iraq.

THESE_IS_A_REWRITE: The Iraqi Council of Ministers has made a decision to deposit the Ministry of Finance’s investment plan funds for the year 2023, amounting to 1.265 trillion dinars, with the Iraqi Trade Bank. This deposit is in relation to completing the export infrastructure within the oil sector and developing Iraq’s capabilities in this field. It specifically pertains to the total cost of the two submarine pipeline projects (4 and 5) and the new marine platform under the Oil/Basra Oil Company.

It has been decided that the Ministries of Planning and Oil will be responsible for the total cost of the mentioned project, including the annual allocations within the Ministry of Oil’s investment budget for the years 2023, 2024, 2025, and 2026. The Ministries of Oil and Planning will inform the Ministry of Finance/Accounting Department about the financing required for the contracting company based on the amount of achievement and approved context. They will also finance the Ministry of Oil from the deposit mentioned in Paragraph (1) above. Additionally, Cabinet Resolutions (29 of 2020), (6 of 2021), and (83 of 2022) will be canceled.

The Council of Ministers has decided to approve an exception to the contract for implementing the Misk Wadi Al-Tharthar project. This includes the purchase of cameras, concrete towers, and establishing fortified points. The decision was made due to the tactical and strategic importance of the project and the need to arm the security services. The approval was granted through direct contracting methods, as stipulated by the Instructions for Implementing Government Contracts (2 of 2014), and in accordance with the armament controls issued by the National Security Advisory. The Council of Ministers will also be following up on the provision of fortifications, requirements for security work, and extending stability.

The Council has approved the issuance of the Air Defense Institute system, based on the provisions of the Military Studies Law No. (4) of 2016, and the Constitution, taking into account the observations made by the Legal Department in the General Secretariat of the Council of Ministers.

Winter agricultural plan

The Council has been monitoring the progress of agricultural plans, the implementation of measures to combat water scarcity and drought, and the adoption of modern methods of irrigation. The Council of Ministers has approved the recommendations from the joint permanent committee meeting between the Ministries of Agriculture and Water Resources regarding the winter agricultural plan for the 2023-2024 season.

The Council has instructed the Ministry of Water Resources to follow the winter agricultural plan, which is based on the forecasts of international meteorological centers. The winter planting and seed distribution season shall commence on October 1, 2023. The Ministry of Water Resources is also directed to start increasing water releases on November 15, 2023, and review the indicators again. The winter agricultural plan will be in effect from November 15, 2023, to November 30, 2023.

In the winter season, it was decided to determine the areas covered by irrigation. The areas covered by irrigation through rivers and streams would be one and a half million dunums, and the areas for which the water share would be secured through underground wells would be four million dunums. It was required to use modern irrigation systems, and those who were negligent would be held accountable. They would not be included in the next agricultural plan when using irrigation in Saiha.

The recent decision involves prioritizing agriculture near rivers and streams, and prohibiting it within the boundaries of marshes and floodplains in the governorates of Wasit, Maysan, Basra, Diyala, and Dhi Qar. Furthermore, it includes offering interest-free loans for purchasing modern irrigation systems such as pivot, fixed, and drip systems, and solar energy systems. The government will also subsidize the price of fuel to the Ministry for water resources and release of fuel shares to address water scarcity issues. Lastly, the authorities plan to continue their campaign to eliminate violations, especially the unauthorized fish lakes.

The Council has decided to form joint committees consisting of water resources directorates, agricultural directorates, agricultural committees, agricultural associations, and police directorates in all governorates and local governments. These committees will oversee the farmers’ and peasants’ compliance with the approved irrigation plan and legally hold accountable anyone who violates it. The two ministries are not responsible or obligated to consider or promote any requests for compensation in such cases. The committees will hold bi-monthly meetings, coordinated between the directorates of the Ministry of Agriculture and the water resources directorates in all governorates, to discuss the progress.

The Council has approved the issuance of the Second Amendment System to the System of the Baghdad School of Expressive Musical Arts (16 of 1985). This system has been audited by the State Council in accordance with the provisions of the Constitution and the Ministry of Culture Law (17 of 2001).

The Council of Ministers has approved the reopening of the Iraqi Cultural Center in Berlin, Germany, as part of cultural relations.

During the meeting, the Council reviewed various files and topics mentioned in the agenda. They made some important decisions, including granting the Ministry of Justice the authority to exclude law firms from the selection mechanism that charge high fees for their services. The committee, consisting of the General Secretariat of the Council of Ministers, has been assigned to oversee the arbitration decision in the Horus Company case and unify legal, political, and technical efforts until September 12, 2023.

The Council has approved the recommendation made by the Ministry of Foreign Affairs with regards to the establishment of non-resident diplomatic representation with the Republic of Moldova. This will be done through our embassy in Bucharest, in accordance with the provisions of Articles 25 and 26 of Foreign Service Law No. 45 of 2008, as well as the Vienna Convention on Consular Relations for the year 1963. Additionally, the Ministerial Council for Human Development has approved the National Strategy for Suicide Prevention in Iraq (2023-2030) as part of its recommendation (B for the year 2023).