As U.S. effort winds down, can Iraq fill `reconstruction gap'?

Team Infidel

Forum Spin Doctor
Media: The Associated Press
Date: 13 October 2006

NEW YORK_Hard behind U.S. tanks and troops, America's big builders invaded
Iraq three years ago. Now the reconstruction funds are drying up and they're
pulling out, leaving both completed projects and unfulfilled plans in the
hands of an Iraqi government unprepared to manage either one.

The Oct. 1 start of the U.S. government's 2007 fiscal year signaled an end
to U.S. aid for new Iraq reconstruction.

"We're really focusing now on helping Iraqis do this themselves in the
future," said Daniel Speckhard, reconstruction chief at the U.S. Embassy in
Baghdad. Many Iraqi government ministries aren't able yet to pick up where
the Americans leave off, he said. "They're very bad at sustainment in terms
of programs and projects."

In 2003, Congress committed almost $22 billion (?17 billion) to a three-year
program to help Iraq climb back from the devastation of war and the looting
that followed, and from years of neglect under U.N. economic sanctions and
Saddam Hussein's rule.

The money, the biggest such U.S. effort since the Marshall Plan in Europe
after World War II, was invested in thousands of projects, large and small,
from rebuilt oil pipelines and upgraded power plants to schoolbooks, new
ambulances, and plant nurseries to replenish Iraq's groves of date palms.

But the U.S. and Iraqi planners, engineers and construction crews faced
major obstacles in a landscape wracked by anti-U.S. insurgency and
Iraqi-on-Iraqi violence, in an economy bled by corruption, and in a nation
abandoned by thousands of its skilled hands and shunned by much of the

In this dangerous environment, almost $6 billion (?5 billion) in that U.S.
reconstruction aid was diverted to training Iraqi police and troops and to
other security costs, adding to what U.S. auditors now dub a "reconstruction

Fewer than half the electricity and oil projects planned have thus far been
completed, internal documents of the U.S. reconstruction command show.
Scores of other projects were canceled, and the "gap" can be seen in the
streets of Baghdad, where people spend most of their day without
electricity, and spend hours in line for gasoline and other scarce fuels.

Although the Americans will complete jobs already under contract, probably
into 2008, many in the U.S. program are disappointed Congress chose not to
underwrite essential new projects.

"I always thought there would be value in having more money. (Other) donors
haven't been coming in," noted Maj. Gen. William McCoy, senior U.S. Army
engineer overseeing reconstruction. Of almost $14 billion (?11 billion)
pledged in 2003 by non-U.S. donors, barely $3 billion (?2.4 billion) has
been disbursed.

From one key Iraqi's perspective, much of the money that has gone to
reconstruction has been misspent.

"Huge amounts of funds were wasted because of bureaucracy, corruption,
incapacity and the spending of money on unimportant projects," Ali Baban,
planning minister in Iraq's 5-month-old government, told the AP.

In a series of high-profile cases, big names in U.S.
engineering-construction _ Parsons, Bechtel, Halliburton _ were criticized
for poor performance. In one recent example, the Special Inspector-General
for Iraq Reconstruction last month said renovation of Baghdad's police
academy, overseen by Parsons Corp., was so shoddy that sewage dripped
through a new dormitory's ceilings.

"My biggest disappointment has been the issues we're having to recover from
with bad work by American contractors," McCoy said by telephone from

The auditors say, however, that most projects show good workmanship and
quality control. American officials point particularly to what Speckhard
called a "very significant success in helping the oil sector get back on its
feet" _ vital to Iraq's future, since more than 90 percent of its government
revenues come from oil sales.

It was a struggle, against insurgent sabotage, equipment breakdowns and oil
smugglers, but Iraqi oil production, which scraped bottom at 1.4 million
barrels a day last January, is again approaching prewar levels, hitting 2.5
million a day in June. It has dropped back slightly since.

Oil exports this summer topped 1.65 million barrels a day, said to be the
level necessary to generate extra funds for reconstruction.

Reconstruction officials point, too, to U.S.-financed work on Iraq's schools
_ rehabilitation of most of the 12,000 schools needing it, training of more
than 100,000 teachers _ and to progress in restoring or extending drinking
water and sewer lines to more Iraqis. But a U.S. executive recently
underscored how the nonstop Sunni-Shiite Muslim bloodshed can obstruct, in
sometimes gruesome ways, Iraq's recovery.

"Water treatment plants have been shut down by the accumulation of dead
bodies in canals," Bechtel's Cliff Mumm informed a congressional committee
as he listed contractors' problems in Iraq.

The greatest problems plague the giant U.S. effort to restore Iraqi

By adding 2,710 megawatts _ more than the output of America's Hoover Dam _
U.S. engineers have boosted Iraq's potential generating capacity to over
7,000. But power hasn't flowed at anywhere near that capacity, and seldom
topped even the paltry level of prewar Iraq, about 4,500 megawatts. Baghdad
suffers especially, getting no more than four to six hours of electricity a

On the day McCoy was interviewed, national output was 4,200 megawatts. Said
the general, ending a 16-month Iraq tour, "I wanted to have electricity
working a whole lot better."

Iraqi officials are quick to blame insurgent sabotage, but engineers say
it's often utility workers outside Baghdad who cut lines, keeping power in
their areas. McCoy also attributed shortfalls to a surging demand for
electricity, erratic fuel supplies and poor maintenance _ a point the Iraqis

"Most power stations are old and need constant maintenance that cannot be
provided," said Aziz Sultan, Electricity Ministry spokesman.

That "sustainment" worries the Americans.

Auditors following up last year found one-quarter of completed
water-treatment plants had broken down. "Concerns remain about Iraq's
capacity to operate its expanded and modernized infrastructure," the special
inspector-general, Stuart W. Bowen Jr., reported on July 31. Limited new
U.S. spending will focus on training Iraqis in operations and maintenance.

The Americans worry, too, about the Baghdad government's ability to invest
oil funds effectively.

"A second real challenge in this country is to make sure money is spent
wisely and avoid corruption," Speckhard said.

Corruption and theft, petty and grand, touches every corner of Iraq.
American officials say tribal chiefs sell material from downed power lines
and then charge "tariffs" for access to repair them. Hundreds of Oil
Ministry staff have been fired after allegedly smuggling Iraq's poorly
monitored oil or fuel products out of the country or into the black market.
Even medicines vanish, leaving hospitals in short supply.

As the U.S. fiscal year ended, the Army congratulated its reconstruction
teams on what they've accomplished in Iraq. "Never has so much been done, so
well and so quickly, by so few," it said. One measure of sacrifice: At least
575 Iraqi and other contract workers, many in reconstruction, have been
killed since 2003.

But huge challenges lie ahead in a country where a third or more of the work
force remains unemployed. On electricity alone, the Iraqis estimate they'll
need to find $20 billion (?15.9 billion) more to finish the modernization.

Carlos Pascual, who headed the reconstruction office at the State Department
until this year, said Iraq's sectarian bloodletting, unsettled politics and
paralyzed decision-making make hope of a quick recovery illusory.

"There were people seriously committed to try to put in place programs to
improve the lives of Iraqis," the ex-ambassador said. "The problem was it
was never happening in a context that could make it sustainable."