Case Study: Basra–Najaf Highway — Rebuilding the Artery of Southern Iraq

Overview

The Basra–Najaf corridor — a 500-km transport and infrastructure route connecting Iraq’s southern oil hub to its religious and economic centre — was intended to be a model of post-war reconstruction.

However, repeated execution delays, contract disputes, and funding gaps turned it into a symbol of the challenges foreign and local contractors face delivering large-scale projects inside Iraq’s evolving infrastructure framework.

Background

The highway was launched in 2019 under Iraq’s Ministry of Construction and Housing, supported by oil-revenues and international contractors through mixed EPC and PPP arrangements.

The goal: to rebuild a dual carriageway with bridges, service facilities, and adjoining utilities, improving logistics between Basra’s ports and Najaf’s growing pilgrimage and industrial traffic.

By 2022, contracts had been signed with multiple joint ventures — including Turkish and Chinese firms — and site mobilisation had begun. But progress soon diverged sharply between segments: some zones advanced, others stalled for months.

Key Challenges

1️⃣ Fragmented Contracting Structure

Each segment was tendered under separate ministry directorates, creating overlapping scopes and inconsistent payment schedules.

Contractors were unclear on right-of-way authority, utilities relocation responsibility, and coordination with oil-pipeline easements.

2️⃣ Land Acquisition & Security

Hundreds of parcels required local approvals and compensation.

In politically sensitive areas, site access was suspended due to security coordination delays.

Contractors often had machinery idle for weeks awaiting clearance, burning through budgets.

3️⃣ Import and Logistics Bottlenecks

Heavy machinery and prefabricated bridge elements arriving through Umm Qasr Port faced unpredictable customs timelines.

Perishable asphalt and aggregate shipments from Kuwait expired in queue; suppliers stopped shipping until payment and storage costs were resolved.

4️⃣ Financial Friction

Budget disbursements were tied to fluctuating oil revenues, creating payment gaps lasting months.

Some contractors were forced to fund operations internally, while others slowed work until invoices cleared — compounding delays.

5️⃣ Engineering & Compliance Disconnect

While the design followed international highway standards, local supervision teams lacked experience enforcing them.

Contractors oscillated between over-engineering (to protect against claims) and minimal compliance (to survive cashflow crunches).

Outcome

By 2024, only 55 % of the total planned corridor had reached substantial completion.

Several contracts were renegotiated, shifting from lump-sum EPC to hybrid milestone-based frameworks.

A new coordination committee was formed in Baghdad to unify oversight, and local contractors were brought in to manage specific bottlenecks — particularly drainage, lighting, and safety barriers.

While the project remains ongoing, delivery efficiency improved markedly once unified project coordination and direct local engagement were introduced.

Lessons Learned

1. Central coordination beats fragmented oversight. Large corridors need one accountable authority to synchronise design, payments, and progress monitoring.

2. Finance dictates delivery. Even technically capable contractors fail when payment flows lag; financial modelling must reflect revenue volatility.

3. Customs and logistics require advance planning. Port clearance, insurance, and storage should be planned like construction milestones.

4. Local engagement reduces risk. Early involvement of governorate officials and landowners prevents site suspensions later.

5. Hybrid contract models work. Fixed pricing for materials + milestone payments protect both ministry and contractor under uncertain conditions.

Conclusion

• The Basra–Najaf highway demonstrates both Iraq’s infrastructure ambition and its execution challenges.

• Projects succeed not only through engineering excellence but through integrated commercial, logistical, and governance planning.

• For foreign firms entering Iraq, the lesson is clear: design and capital alone are not enough — delivery demands coordination, presence, and adaptability.