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Iraq reconstruction behind schedule

Aug 01 2007

Iraq reconstruction behind schedule

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By Agencies

Bowen's report questions Iraqi commitment to reconstruction [EPA]
Reconstruction efforts are not proceeding as well as can be expected in Iraq and the government is to blame for many of the problems according to a new US report.

The report by the office of the special inspector-general for Iraq reconstruction says the Iraqi government is struggling to administer its budget for oil, public works and education.

The US congress created the inspector-general post (Sigir) to oversee how funds were being spent in Iraq.

The quarterly report by Stuart Bowen released on Monday questioned the practices of some US government contractors, but noted "significant strides" in small-scale US-funded projects.

'Grave questions'

In his report, Bowen said the handing over of completed US-funded rebuilding projects to the Iraqi government "has been off the rails" for about a year.

He said, as a result, the projects were being transferred without the Iraqi government's consent to locals who have little training or resources to sustain them.

"The failure of the asset-transfer programme raises concerns about the continuing operation and maintenance of US-constructed projects"

The special inspector-general's report

"That raises grave questions about the sustainability of what the US has constructed," he said.

The report indicates a shift of blame regarding the rebuilding in Iraq.

Previously criticism has been directed at large US companies awarded contracts for reconstruction.

Media reports said last year that government estimates indicated as much as half the budget of some reconstruction projects had been spent on overhead costs.

The highest proportion of those overheads were incurred by the Halliburton subsidiary KBR in its oil-services projects.

KBR was one of several large US contractors awarded reconstruction projects in 2003 after the war.

Bowen's report showed serious problems including insufficient oversight, cost overruns and significant delays in the billion-dollar reconstruction programme of Bechtel national, another of the contractors.

Auditors said a contractual provision that required all Bechtel invoices to be paid within 10 days of receipt was "troubling" because it raised concerns "about the reliability of receipt review process".

Project lag

Bechtel ended the majority of its projects late last year after three years in the country which saw 52 of its employees killed.

Sigir

To read the full Sigir report, click here

So far, more than $99.5bn has been pumped into rebuilding Iraq, of which $44.5bn was spent by the US on relief and reconstruction work since 2003.

The US has completed nearly 2,800 projects, worth about $5.8bn, constructing power stations and water treatment plants as of May 31.

But out of these, Bowen's report found that only 435 projects have been transferred to the Iraqi government, leaving more than 2,300 completed projects still under US companies.

The report details the failure of the $90m US-funded Dura power plant, Baghdad's principal supplier of electricity, after it was turned over to inexperienced locals who used the wrong fuel.

In some case, the US was still paying to maintain completed projects that have yet to be handed over to Iraq, according to the report.

"The failure of the asset-transfer programme raises concerns about the continuing operation and maintenance of US-constructed projects," it said.

Iraq's failure to effectively manage its capital budget was also blamed for the problems facing reconstruction efforts.

The report said the government spent only 22 per cent of its budget in 2006, but noted improved figures in 2007, and predicted an improvement of up to 50 per cent if the current trend continues.