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Iran wins major infrastructure contract in Iraq

BAGHDAD Iraq has awarded a vital infrastructure contract to Iran that could facilitate its military presence in a developoment that has alarmed the U.S.

The Iraqi Electricity Ministry has selected companies from China and Iran to construct two power plants. The ministry said the awards totaled $1.1 billion and would reduce the constant power outages in Baghdad.

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The award to Iran for the construction of a 160-megawatt power plant in Baghdad's Sadr City has alarmed the U.S. military in Iraq, Middle East Newsline reported. Military sources said the U.S.-led coalition was concerned that Iran could use the $150 million project to significantly expand its intelligence and military presence in Iraq.

Iran has sought to dominate Iraq's Shi'ite sector. Teheran has agreed to provide cheap electricity from its own grid to Shi'ite areas of southern Iraq. Iran has also offered to build a large power plant without cost to the Baghdad government between the Shi'ite cities of Karbala and Najaf.

The Chinese power plant would be located in the Iraqi province of Wasit. Officials said the 1,300 megawatt facility, awarded to China's Shanghai Heavy Industry, would cost $940 million.

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