An Italian group will begin construction in a month on what will become Iraq's largest shipping port, the Iraqi Transport Minister Amer Abduljabbar Ismail announced yesterday.

The facility at Fao, at the southernmost tip of the country, will be fed by a new rail line linking it to the Turkish border in the north, dramatically improving Iraq's moribund transport infrastructure, according to a report in our sister newspaper Gulf Daily News.

'Fao, which will be built by an Italian consortium, will be the biggest port in Iraq,' Ismail said in a ceremony at Fao, 535km south of Baghdad.

'This project is part of a larger vision that we call a 'dry canal' which will allow for transport of goods between the north and the south of the world quickly, cheaply and safely.'

An Italian diplomat said the port 'will be among the biggest in the world. It will be able to handle the largest container boats and all kinds of huge tonnage vessels.'

The consortium will be led by Italian engineering firm Technital and will include other Italian construction firms partnering with the Iraqi transport ministry.

'Italy is going to provide training on port design, construction and management, as well as technical assistance and planning on industrial zones in the country which will be relevant for the activities of the port,' the diplomat added.

The $4.6-billion project will be the biggest infrastructure project in Iraq in 30 years, and will be funded by Iraqi and foreign finance, both public and private.

Once completed, Iraq hopes to compete with the Suez Canal which connects the Red Sea and the Mediterranean and through which more than 14,000 ships passed last year.

According to the transport ministry, the huge 100-dock facility will have an annual capacity of 99 million tonnes.

Fao, near the port city of Basra, was the site of fierce battles between Iraq and Iran during the two countries' war between 1980 and 1988.