Exclusive: Russia, Iran Race for Syria Reconstruction Deals
Russia is working relentlessly to push against Iran tapping into Syria’s reconstruction projects, as the two compete for securing the largest share of investment contracts in the war-torn country.
Iran is hoping to make up in reconstruction deals what it had lost in the energy field after Russia having monopolized memorandums of understanding signed for repairing a power grid and extracting from one of Syria’s lucrative phosphate mines.
Reconstruction deals multiplied in numbers after Syrian regime head Bashar Al-Assad issued an order to establish two new administrative zones within the capital’s vicinity.
In an effort to clear Damascus from any rebel presence, Assad issued in 2012 Presidential Decree No. 66, which stipulates erecting full infrastructure for two new zones within Damascus.
Codenamed district 101 and 102, the two areas are located in Al-Mezzeh neighborhood west of the capital and extend to reach beyond Kafr Sousa neighborhoods.
District 101 is connected to 102 on the south-east side, extending from the south-eastern parts of Kafr Sousa to neighborhoods south of Damascus.
Damascus presented the blueprints for district 101 under the name Marota City, which is Syriac for heaven. It covers an area of 2 million square meters and set up to include 12 thousand apartments spread over 168 towers and multi-story buildings.
It will also be home to 17 academic institutions, four gas stations, three mosques and a church.
Annexed to district 101’s southeastern side, district 102—named Basilia City, Syriac for "homeland" or "sovereignty"-- covers areas located between Al-Qadam and Yarmouk refugee camps.
Interestingly, all neighborhoods covered by Assad’s reconstruction decree were home for popular anti-regime movements and were reduced to rubble in the aftermath of the civil war.
The Damascus Governorate established “Damascus Cham Holding Company” for managing real-estate and reconstruction, primarily the project's land plots and singing construction contractors for establishing 101 and 102.
“Iran rushed to invest heavily in Area 101, which is nestled behind its old embassy and very close to its new embassy pegged on the Mezzeh highway," traders and real estate agents signed up with Damascus Cham Holding told Asharq Al Awsat.
Sources explained that “any company can partner with Damascus Cham Holding Company to establish a new construction company.”
“Damascus Cham Holding Company provides the land plot and while the consigned partner provides construction funds, under a partnership agreement the former decides on the split of project ownership, whether at 55 percent - 45 percent, 51 percent or 49 percent, depending on location and volume of construction.”
Sources confirmed that Iranians and Iran-linked Lebanese nationals moved swiftly to establish companies in Syria.
After an under-the-table agreement struck between Iran and Qatar, which swept and cleared neighborhoods and cities from opposition factions’ presence, namely Darayya, Iranian officials landed a contract with authorities to build some 30,000 housing units within area 102.
Darayya lies 5 km south of the Iranian embassy and has the Mezzeh airbase under a kilometer away, but Tehran denies the above strategic value of the location, swapping it with religious motives of the area being home to a shrine of a prominent Shiite figure.
The city has substantial geopolitical and logistics value, given that it borders Lebanon and is an outpost for top regime command and intelligence centers.
Despite the Iranian out-of-breath rush into singing reconstruction deals in Syria, another regime ally, Russia, is actively blocking Tehran’s attempts to land deals inside or about Damascus, senior Syrian real estate agents, speaking under the condition of anonymity, told Asharq Al-Awsat.
Sources added that leaks strongly indicate that Russians enjoy the upper-hand when it comes to landing reconstructions contracts in area 102.
In some areas pending reconstruction, the Russia-Iran business battle delayed the return of displaced locals to their homes, such as Al-Malihah town.
According to the Rif Dimashq local reconstruction committee, 1.2 million homes, more than 5,500 schools were destroyed, 60 percent of health facilities sustained damage and are in need of some level of rebuilding. Public property suffered a loss of some $6 billion in assets.
A government-linked Iranian newspaper cited a report previously published by a Revolutionary Guard website on Iranian-Russian differences over reconstruction in Syria to uncover new dimensions of the differences between Moscow and Tehran over the post-war share-sharing of Syria.
Whereas the regular military defends Iran's borders and maintains internal order, according to the Iranian constitution, the Revolutionary Guard is intended to protect the country's theocratic system. Armed to its teeth, Revolutionary Guard forces answer to orders issued by the Iranian Supreme Leader solely.
The newspaper said that “nothing” is the share Iran has secured from the post-war Syria market, pointing out that most reconstruction contracts are signed up to President Vladimir Putin’s Russia.
Despite the high costs paid by Iran to support Assad, Iran is not getting any leverage in emerging post-ISIS reconstruction markets in Syria.