Iraq eyes 8 foreign firms for $3bln metro project

* Shortlists WS Atkins, Versar, 6 others for Baghdad deal

* Project expected to help ease taffic jams

By Aseel Kami

BAGHDAD, May 26 (Reuters) - Iraq has shortlisted eight foreign firms for the construction of a $3 billion metro rail through the capital Baghdad as it seeks to rebuild infrastructure damaged by decades of war and underinvestment.

Baghdad's municipality media office said on Wednesday the companies -- which include British engineering consultancy firm WS Atkins (ATKW.L) and U.S. project management company Versar (VSR.A) -- would have to present their bids to the project consultants, French engineering group Systra.

The other companies shortlisted for the contract are a consortium of British project managers Halcrow Group, German consulting firm Dorsch and Finnish engineering and consulting group Poyry (POY1V.HE); British firms Mott MacDonald and Arup; Italy's Torno and IECMB; and U.S. firm Parsons Brinckerhoff. "The metro rail will help to solve a big part of the problem in Baghdad's streets, which suffer from huge traffic jams due to the continuous rise in the number of cars that have entered Iraq (since the 2003 U.S.-led invasion)," the office said in a statement.

Most commuters in Baghdad are dependent on taxis and buses for transport, and it often takes hours to travel short distances due to traffic congestion and long queues at security checkpoints which are dotted all over the city.

The underground project, which was initially drafted in the 1980s but put on hold due to years of war and international sanctions, will be the first of its kind in the war-shattered country if it comes to fruition.

Violence in Iraq has dropped sharply in the last two years, giving government the chance to invite foreign firms to invest in the country to help rebuild its deteriorated infrastructure.

The first line of the metro, which will be 21 km (13 miles) long and have 21 stations, will start in al-Mesbah in central Baghdad and then split into two minor lines. One of the lines will end in Weshash in western Baghdad and the second in the southwestern Bayaa area.

The metro's second major line, expected to be around 18 km (11.2 miles) long and have 20 stations, will start in the Sadr City district in northeastern Baghdad, pass through central Baghdad, and end in the northern Adhamiya area. (Editing by Serena Chaudhry and Hans Peters)