After President Donald Trump’s intervention, Siemens may have to share a multi- billion dollar deal with General Electric, its U.S. rival to improve Iraq’s energy supply system according to reports by The Financial Times on Wednesday.
Based on statements by people familiar to the matter, it has been reported that the U.S. government intervened favoring GE by pressurizing the government of Iraq.
Even though, firm decision on the matter has not been made, the $15 billion contract was to be Siemens’ given that it was a popular choice to supply 11 gigawatts of power generation equipment to Iraq.
However, Iraqi government was reminded by Trump’s administration how 7,000 American soldiers lost their lives to overthrow Saddam Hussein.
GE is now expected to take a considerable share of the sale and the outcome might reflect in its third- quarter earnings on Oct 30, which otherwise had been dealing with a severe downturn in its power division.
A Siemen’s spokesperson informed that the company is still hoping to enter an official agreement to provide affordable, reliable and sustainable energy for Iraq as their discussions with the government are still not over. Joe Kaeser, the Chief Executive of Siemens and the Iraqi Prime Minister Haider al- Abadi had a discussion about the contract when the former had travelled to Iraq in September.
However, since then the prime minister has been changed to Adel Abdul- Mahdi and the pressure for the United States in favor of GE has also increased according to reports.
Siemens February offer was to build new power plants in Iraq over a period of four years with an output of 11 gigawatts could increase energy production, eventually increasing the availability of reliable energy by 50% to 23 million for more number of Iraqis.
The deal could help Siemens support its ailing energy division whose profits have dipped by 60% in the first three quarters of this year; and the value is estimated at 11 billion euros.
A Siemens spokesman stressed on the importance of the Iraqi Roadmap to the company and its commitment towards it. He further added that the company has submitted their roadmap to the Iraqi government in February and has had many meetings and discussions since then with positive feedback from the government.