The construction of the Al-Faw Grand Port in the southern Iraqi city of Basra, expected to be one of the largest ports in the Middle East, is picking up steam. The 10-mile breakwater built for the port broke the Guinness World Records and won the title of “longest breakwater ever built.” The broader port project, led by the South Korean company Daewoo, is planned to extend over 20 square miles and include industrial zones, housing projects, and tourist attractions and, so far, it has cost over $4.83 billion. The port aims to be a transportation hub between Asia and Europe.
The broader project will include a highway and rail line dubbed the “Dry Canal” corridor. The corridor, which is expected to be completed by 2038 and cost around $20 billion dollars, will pass through Diwaniya, Najaf, Karbala, Baghdad, and Mosul and extend to the Turkish border, providing access to Mersin Port and Europe via Istanbul. Planning for the project is infused with a turbocharged scope of ambition that belies the formidable political, security, financing, and feasibility challenges that in Iraq make implementation of such large-scale projects difficult.
The project’s success is dependent on a number of geopolitical factors. While there are opportunities for Iran to benefit from the project via a railway that will extend from Basra to its own border, Iran as a regional power could feel it is being bypassed by the corridor. If Iranian leaders feel Iran’s interests are threatened, they could try to sabotage the project through Iran’s influence in Iraq and the Gulf. It remains to be seen whether the project’s backers have the political deftness and design chops to alleviate potential Iranian concerns while maintaining the integrity of the ambitious plan. With Iran suffering under heavy international sanctions and motivated by a policy imperative to keep Iraq dependent and in Tehran’s sphere of influence, there may not be any concessions the project’s backers could offer to alleviate outsized Iranian concerns.
Additionally, political instability and insecurity in Iraq could jeopardize the project as could tensions between Erbil and Baghdad. The project’s success is particularly dependent upon security conditions in the region. While security has improved over recent years, the Islamic State in Iraq and the Levant is still active, as is the militant Kurdistan Workers’ Party (PKK). Besides these groups, pro-Iranian militias may be motivated to interrupt the construction of the corridor to hinder access to Turkey. Competition between Iran and Turkey in northern Iraq, particularly Mosul, is intensifying. The PKK periodically attacks the oil pipelines that extend to Turkey from Iraq, and pro-Iranian militias often attack Turkish military bases and interests in Iraq. ISIL fighters also may target the corridor. Improving security conditions in Mosul is essential for the success of the corridor, and closer coordination between Ankara and Baghdad may help reduce insecurity.
By creating an alternative line from the Far East to Europe, the project is destined to affect Gulf geopolitics and has the capacity to disturb Iran’s presence in the region, as it will directly connect the Gulf states to Turkey. With the dream of becoming a transportation corridor between sea and land, Iraq aims to take its place in the commercial line between Mersin Port in Turkey, the Port of Bandar Abbas in Iran, and Sharjah’s Port of Khalid in the United Arab Emirates. If the massive project is ever completed, Al-Faw is projected to surpass Dubai’s Jebel Ali Port, which is currently the largest container port in the Middle East with 67 berths, and also potentially overtake the Red Sea transportation route, or at least become a strong competitor.
The temporary closure of the Suez Canal in 2021 halted commercial activity between the Mediterranean and the Red Sea. Cargo from the first ship to arrive from Sharjah’s port in Bandar was then transported to Turkey by road in fewer than 10 days in December 2021. Considering that the transportation time between the Mediterranean and the Red Sea is three weeks, the Dry Canal corridor to the Turkish border via Al-Faw is expected to save considerable time. Therefore, if the project is completed, transportation from the Gulf to the Mediterranean – or vice versa – will become easier. Demonstrating the importance of transportation between Turkey and the UAE, a transportation deal was among the 13 cooperation agreements signed by Turkey and the UAE in February 2022. Discussing plans for transportation projects that will connect the Gulf with Europe, Turkish Foreign Minister Mevlut Cavusoglu stated those rail lines and highways will run through Iraq.
Given the scope of such a project, political or even financial support from wealthy Gulf states, such as Saudi Arabia and the UAE, could be helpful, especially given how much impact it would have on trade flows and transportation if completed. At the same time, the very scale and ambition of the project might stir concerns in Riyadh and Abu Dhabi that its impact would be outsized to their detriment. Representatives of countries in the region came together for a conference in Basra December 6-8 to discuss the project. Iran, perhaps channeling its concerns, stayed away from the gathering.
Political Turmoil and Insecurity
Major projects in Iraq provide ample opportunities for political parties and affiliated security forces or militias to accumulate financial gains. The pro-Iranian Badr Organization has had significant influence in Iraq’s Ministry of Transport. The minister from 2014-16 was Badr Organization leader Hadi al-Amiri, and many people affiliated with the organization have held positions of power in the ministry. However, significantly, the port project is supported by Shia leader Muqtada al-Sadr, and its construction is being managed by members of the Sadr movement. Rivalry among Shia groups has already had implications for the project. For example, the pro-Iranian Asaib Ahl al-Haq militia pushed for Chinese companies to win the bid for the port project, while Sadr wanted South Korea’s Daewo Engineering and Construction to run the project. There have also been occasional conflicts between Asaib Ahl al-Haq’s security company and a local security company affiliated with Sadr in the port. The rivalry has prompted questions around the suspicious death in August 2020 of Park Il-ho, who led Daewoo’s operations in Al-Faw.
Similar tensions are likely to emerge around the Dry Canal corridor. The Italian company PEG Infrastructure is conducting feasibility studies and designing the corridor, and the Iraqi government will likely turn to international companies for its construction as well. The Iraqi government estimates that the construction of the double-track rail link from Basra to the Turkish border could cost $13 billion. And, since the corridor offers the potential to stimulate local economies, local actors and militia groups are fighting over the areas it will pass through and employment contracts. The Beit Shaya tribe in Basra, for example, held protests in 2021 to demand jobs at the port. Farhan Al Fartousi, the director of Iraq’s port authority, who is associated with the Sadr movement, had spearheaded negotiations with Daewoo to provide more jobs for Beit Shaya members.
Reconciliation between Erbil and Baghdad will be critical to the success of the Dry Canal. Turkey’s entire border with Iraq is under the control of the Kurdistan Regional Government. The corridor is expected to extend to the Faysh Khabur region, at the intersection of the Iraqi-Turkish-Syrian border. Long-standing budget, energy, political, and security disputes between the KRG and Baghdad could make for a rocky road for the corridor.
The KRG is concerned that it could be bypassed by a proposed new border gate along the corridor. After the KRG’s independence referendum in 2017, Turkey proposed the construction of the Ovakoy border gate, as an alternative to the KRG-controlled Habur Border Gate, to pass through Faysh Khabur. Erbil opposed the Ovakoy project, concerned the new border crossing would reduce the need for the Habur Border Gate. Relations between Erbil and Ankara have improved in recent years, but the KRG is still concerned about the implications of such a scenario. Erbil is aware that in the event of a political crisis, for example, another attempt at KRG independence, both Ankara and Baghdad might try to disable Habur as a trump card. However, Turkey argues that Ovakoy is not an alternative to Habur but a complement to it. Therefore, the completion and future of the Dry Canal is dependent upon a strong Ankara-Erbil-Baghdad political framework.
The port and corridor projects were suspended from 2010-21 due to internal political conflicts, corruption, and the lack of transparency in the contracts between the Iraqi government and international companies. Decreasing tensions in Iraq’s internal politics and increasing communication with the countries of the region will enhance the prospects for success of the project. For now, given the daunting challenges Iraq faces – a ferocious geopolitical force field anchoring it to Iran, massive corruption distorting bidding and contracting processes, and political infighting among rival parties, coalitions, and militias, rendering sustained political and financial collaboration deeply problematic – such an ambitious, visionary project seems more pipe dream than possibility. The ambition of the massive project, nonetheless, speaks to the impressive, stubborn optimism routinely found in Iraq these days, despite the terrifically difficult challenges the country faces. And it is a reminder of some of the country’s past glory and regional influence, which still shape Iraqi commercial ambitions and the way Iraqis wish to project their future.