Iraq's southern city of Basra, which has seen violent protests over power cuts amid soaring summer temperatures, has threatened to bypass the electricity ministry to provide additional power.
Due to increased demand, it was decided to boost the output of the 120-megawatt Nejaibiya power plant in the port city by an additional 500 megawatts.
The electricity ministry purchased power units from General Electric, but the provincial council has to finance the infrastructure and the assembly.
The 288 billion Iraqi dinars ($244 million) for the project "was allocated from the 2010 budget... Now we are in 2011," Basra provincial council Sabah al-Bazuni told AFP.
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"If the project will not be implemented by the ministry of electricity, we will approve it and will do it ourselves," he said, giving the ministry until Thursday next week to act.
Electricity ministry spokesman Musab al-Mudaris said the infrastructure for the units was supposed to be built by a Saudi-Korean consortium, and the delay was due to a dispute between the firms that lead the contract to be cancelled.
South Korean industrial giant Hyundai has now been selected to carry out the project, he said.
Hyundai "will be given three months to present its guarantees and financial commitments. After that they will do the project which will take 18 months," he said.
More than eight years after the US-led invasion that toppled Saddam Hussein, Iraq still suffers from a severe shortage of electricity.
Iraqis are left with the choice of having only a few hours of electricity per day in a country where temperatures top 50 degrees in the summer, or getting extra power from private generators.