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Iraq allocates $275 bln for projects over five years

Iraq has earmarked $250-275 billion for spending on infrastructure projects and other investments over the next five years, the planning ministry said on Wednesday.

Iraq needs development in almost every sector, as rubble and incomplete buildings are still commonplace more than nine years after the 2003 U.S.-led invasion that toppled Saddam Hussein.

"Allocating these huge sums will have a positive effect on pushing the development pace forward," Planning Minister Ali al-Shukri, who was attending a financial and investment conference in London, said.

The investment plan will run from 2013 to 2017, his office said in a statement about his visit, without giving further details about possible projects or investors.

Shukri called on foreign companies to invest in Iraq's housing, tourism, agriculture, industry and higher education sectors.

Other than oil, economic development in Iraq has lagged despite an easing of violence since the height of sectarian strife in 2006-2007.

Al-Qaeda militants and other insurgent groups are still active however, and manage to hit Iraq with daily attacks, bombings and assassinations which make security costs a large burden for foreign investors.

Investors also complain about bureaucracy and red tape. Government infighting has delayed projects in areas such as electricity and telecommunications.

However, the market is potentially lucrative for foreign investors.

On May 30, Iraq signed a final contract worth $7.75 billion with South Korea's Hanwha Engineering & Construction company to build 100,000 housing units on the outskirts of Baghdad as part of the government's plan to alleviate a severe housing shortage.

Also in May, the deputy minister of industry said that the ministry was in talks with Shell to build a petrochemicals factory that would cost at least $8-10 billion in the southern oil hub of Basra. (Reporting by Aseel Kami; Editing by Helen Massy-Beresford)

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