August 18, 2011 / 3:36 PM / 8 years ago

Iraq electricity minister resigns over power deals

* Minister resigns over contract irregularities

* Deals were worth $1.7 billion

* Iraq has a chronic electricity shortage

By Aseel Kami

BAGHDAD, Aug 18 (Reuters) - Iraq’s electricity minister has resigned on the request of the country’s premier after irregularities worth $1.7 billion were uncovered in power deals with two foreign firms, a government official said.

Ali al-Moussawi, media adviser to Prime Minister Nuri al-Maliki, said on Thursday Maliki had accepted Raad Shallal’s resignation earlier this week.

A statement from the premier’s office on Saturday said Maliki had dismissed Shallal for not following correct procedures in signing contracts.

“The measures taken against the minister of electricity were about contract management. His personal involvement in corruption issues, which demand other measures, have not been proved to us,” the statement said.

Earlier this month, an ombudsman that oversees the electricity ministry said it had discovered that two power plant contracts Iraq signed with foreign companies were either bogus or the firms had lied about their financial status.

The government labeled Canadian company CAPGENT as “fake”, with no offices, and said the second firm, Germany’s MBH, had declared bankruptcy.

Maliki dismissed Shallal on Aug. 7, but under Iraqi law the decision had to be approved by parliament.

Shallal’s resignation means that parliamentary approval is no longer needed, an Iraqi lawmaker said.

“Resigning and the acceptance of the resignation does not need Parliament approval,” Omar al-Jubouri, a member of the legal committee in Parliament, told Reuters.

Iraq needs investment in most of its industries after years of war and economic decline, but power generation is especially sensitive.

Its war-battered grid provides only a few hours of power a day, and chronic shortages were at the heart of anti-government protests earlier this year.

The national grid is expected to supply less than half of Iraq’s 15,000 megawatt peak demand this summer as temperatures head above 50 degrees Celsius. Protests have tapered off, but complaints about power and poor services often rival security concerns for many Iraqis. (Reporting by Aseel Kami; Editing by Serena Chaudhry and Jane Baird)

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