Contractors jailed as Diyala authorities owe $300M+ in unpaid dues

Shafaq News – Diyala

Government institutions in Diyala, eastern Iraq, owe contractors nearly 500 billion dinars (about $350M), a local official told Shafaq News on Saturday.

Ismail Barhoumi, head of the Diyala Contractors Union, said that firms are continuing work on assigned projects even though existing dues remain unresolved, recalling that caretaker Prime Minister Mohammed Shia Al-Sudani pledged 5 trillion dinars ($3.5B) in nationwide payments, but the amount released was short by more than 2 trillion dinars ($1.4B).

“Some contractors have been jailed over unpaid obligations, while others have abandoned the sector altogether,” Barhoumi added, noting that only around 200 companies remain active, compared with more than 1,100 previously listed in the province.

Iraq has struggled for months to finance public works as spending remains restricted under the 1/12 rule, due to the absence of the 2025 budget tables, a delay that has frozen payments, stalled reconstruction, and intensified service deterioration across several provinces.

Read more: Funding freeze hits key projects as Iraq waits for 2025 budget