Kurdistan contractors seek compensation for rising dollar costs
Shafaq News- Erbil
Contractors in the Kurdistan Region on Thursday called on the Kurdistan Regional Government (KRG) to compensate them for financial losses caused by a rise in the dollar exchange rate, higher construction costs, and delayed payments.
Speaking at a press conference, contractors' representative Ajeen Mohammed said the dollar's exchange rate had risen by about 20,000 Iraqi dinars over the past month, driving up the prices of construction materials and raw materials. “The increases have caused financial losses for contractors and disrupted work on construction projects and housing developments.”
Mohammed noted that most projects began two years ago or earlier, based on the prices and financial calculations prevailing at the time. The sudden exchange-rate increase had placed additional financial burdens on contractors, while the KRG had delayed payments, citing a lack of liquidity, he said.
Contractors are facing two concurrent challenges: rising exchange-rate-related costs and delays in receiving outstanding payments. Mohammed also pointed to Iraqi legislation that, according to him, allows contractors to seek compensation for losses caused by exceptional circumstances, including wars, border closures, and financial crises.
He urged the KRG to establish a compensation mechanism for affected contractors, similar to measures introduced during the COVID-19 pandemic in 2020. Those measures included compensation amounting to 19% of project values, Mohammed explained, stressing that addressing the financial pressures was necessary to keep projects moving and enable contractors to meet their obligations.
Earlier this month, Iraq's Council of Ministers approved an adjustment to the dollar exchange rate following an urgent recommendation from the finance minister and the governor of the Central Bank of Iraq.
Under the revised rates, the Finance Ministry's purchase rate was set at 1,500 dinars per dollar, the selling rate to banks at 1,510 dinars, and the rate charged to end users at 1,520 dinars per dollar.
The new rate increased the official dollar price for the public by 20,000 dinars per $100 compared with the previous rate of 132,000 dinars per $100. Before the decision, the parallel market had seen sharp increases, with the dollar reaching about 165,000 dinars per $100 amid reports and expectations of an exchange-rate adjustment.
