Case Study: The Hidden Gap — Why Foreign Companies Struggle with On-the-Ground Execution in Iraq

Sabah Al-Shammary
Nov 11
2 min read

Overview

Despite Iraq’s growing portfolio of infrastructure and energy contracts, many international firms still face major barriers turning signed deals into operational projects.

The challenge isn’t ambition — it’s execution: bridging the gap between contract award and real delivery.

Background

A European EPC contractor won a $45 million utilities project in southern Iraq, tasked with designing and supplying power-distribution systems.

Within six months, design work was complete and equipment was shipped through Turkey.

Then everything slowed.

Customs clearances stalled, permits took weeks, and subcontractors struggled to meet compliance standards. Payments jammed inside Iraq’s banking system.

Despite experience across Africa and Central Asia, the firm was unprepared for Iraq’s unique combination of regulatory complexity and fragmented logistics.

The Core Issues

Foreign contractors consistently face three structural gaps when operating in Iraq:

Setup Gap: registering entities, securing residency and local accounts, and navigating ministry approvals can take months without a grounded partner.
Network Gap: finding reliable subcontractors, logistics agents, and local coordinators able to work within Iraqi procedures.
Continuity Gap: rotating foreign staff leads to inconsistent oversight, leaving gaps in follow-through and documentation.

Even world-class firms discover that technical capability alone doesn’t equal delivery capability.

Outcome

After intervention by a joint Iraqi–British project advisory team:

Import and customs documentation was re-sequenced to align with inspection cycles.
Subcontractor terms were tied to phased performance milestones.
A small in-country coordination office handled ministry, customs, and utility correspondence directly.

Delays were cut by nearly 40 percent, and material clearance improved from months to weeks — modest by international standards, but a breakthrough locally.

Lessons Learned

Treat local setup as a project. Company registration, licensing, and logistics each need defined scope, timeline, and accountability.
Invest in the right partners early. Success depends on operational partners, not just intermediaries.
Adapt financial rhythms. Iraq’s banking and approval cycles move differently from Western systems — model for that from day one.
Budget for friction. Extra time, insurance, translation, and security should be built into every delivery plan.