Iraqi court jails foreign engineers over central bank dispute

An Iraqi court has jailed two foreign engineers over a dispute with Iraq’s central bank over its troubled building project, relatives of one man said.

The family of Robert Pether, an Australian citizen, said he and an Egyptian colleague were sentenced to five years in prison in late August. Irish newspaper reports say the Egyptian colleague is called Khalid Radwan, while Australian outlets name him as Khalid Zaghloul.

The two engineers travelled to Iraq in April on behalf of CME Consulting to resolve a contractual dispute with its central bank, relatives told Australian media. Pether’s father told the Guardian’s Australian edition that the engineers were arrested as they met with central bank officials.  

The Central Bank of Iraq did not respond to a request for comment from Central Banking.

CME Consulting is working on the building of a new headquarters for the Central Bank of Iraq, which has an estimated cost of $722 million. The building, including a 170-metre tower, was designed by the late Zaha Hadid. CME Consulting did not reply to a request for comment.

The Australian foreign ministry told the Guardian that it understood the men had been jailed for fraud. But Pether’s family alleges that he is being held to put pressure on CME Consulting to end its dispute with the central bank.

Pether’s wife Desree told Australian TV network ABC that Iraqi authorities “wanted somebody to do the project for less, and so they have basically utilised all the powers that they’ve got at their disposal”.

In August, the Australian government said its foreign minister Marise Payne had made official representations to the Iraqi government about Pether’s case. Payne had “written and spoken to her Iraqi counterpart to advocate for Mr Pether’s case in the strongest terms, including to press the point that an individual cannot be held responsible for the conduct of their company”, it said.

Pether and his family live in Ireland. The Irish Department of Foreign Affairs said that the Australian government was dealing with his case. Australia’s Department of Foreign Affairs did not reply to requests for comment from Central Banking.

Lawmakers criticise project

The Central Bank of Iraq signed contracts with Hadid’s firm in 2010 and 2012 to design the new central bank building. Some Iraqi politicians have criticised the decision to spend such a large sum on the building, and how the project has been managed. 

In November 2018, Iraqi MP Abbass Allawi announced the country’s parliament would hold an inquiry into the project’s cost and progress. Allawi said the main contract building was signed between an Azerbaijiani company and the central bank, media outlet Al-Arabiya reported.

He wanted to know why the contract had not been signed between Iraq’s ministry for housing and reconstruction and its registered firms, the report said.

Sinan Al Shabibi was the central bank governor from September 2003 from October 2012, when the Iraqi government commissioned the new building. The current governor, Mustafa Ghaleb, was appointed by Iraqi prime minister Mustafa al-Kadhimi in September 2020.