Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, March 1, 1991 TAG: 9103010731
SECTION: BUSINESS PAGE: A-5 EDITION: EVENING
SOURCE: Associated Press
DATELINE: LENGTH: Medium
Among the major U.S. companies involved are Bechtel Group Inc., American Telephone & Telegraph Co., Caterpillar Inc., International Business Machines Corp., Motorola Inc. and Raytheon Co.
A host of smaller companies, such as oil-field specialists, also should benefit from what could become the largest rebuilding effort since the Marshall Plan reconstruction of Europe after World War II.
Kuwait is expected to spend the bulk of its rebuilding funds with companies from the United States and other allied nations that fought against Iraq, officials said Thursday.
One of the first chores will be extinguishing the oil-well fires. Nearly two-thirds of Kuwait's 950 oil wells are believed to have been sabotaged by the retreating Iraqis, along with oil storage and transportation facilities.
Three Houston companies, The Red Adair Co., Wild Well Control Inc. and Boots & Coots Inc., will be put to work fighting the oil fires. The companies have not disclosed the value of their contracts.
Once the fires are out, Bechtel, the nation's second-largest construction and engineering company, is expected to head the rebuilding of Kuwait's petroleum industry.
Bechtel received a letter of intent from the state-run Kuwait Petroleum Co. calling for the company to act as the project management contractor, said Bechtel spokesman Mike Kidder.
Bechtel, a privately owned San Francisco company that has worked in Kuwait for 40 years, will send about 4,300 employees and subcontractors to the emirate, Kidder said.
Bechtel said it did not yet have an estimate on the value of the work. Some petroleum experts think the cost of rebuilding Kuwait's oil, natural gas and petrochemical facilities could hit $10 billion.
Rebuilding the rest of the country's infrastructure will cost billions more.
Reports of such a windfall have sent the stock prices of U.S. construction firms and equipment makers soaring in recent days.
"The market's been euphoric," said Richard Sweetnam Jr., an analyst who follows the construction industry for Kidder, Peabody & Co.
Sweetnam said the contracts awarded to construction firms will have a trickle-down effect, since much of the equipment and supplies needed by the contractors will be bought from other companies.
Among companies whose stock has climbed is Fluor Corp., a construction concern based in Irvine, Calif; construction equipment maker Caterpillar Inc.; and CSX Corp., which has a contract to ship emergency supplies to Kuwait.
Caterpillar recently shipped an order of generator sets to Kuwait to be used to restore electrical power. And the Peoria, Ill.-based company could supply Kuwait with large bulldozers for clearing rubble and rebuilding roads.
A number of smaller construction companies should benefit from $45 million worth of reconstruction work being done by the U.S. Army Corps of Engineers on behalf of Kuwait. This will involve rebuilding the nation's highways, airports, water and sewer systems and electrical utilities.
Among the construction firms on a list of potential recipients of Corps contracts are Perini Corp. of a Framingham, Mass., and H.B. Zachry Co. of San Antonio, Texas.
by CNB