Power Grid In Iraq Far From Fixed
New Government Inherits Huge Task

By Caryle Murphy and Bassam Sebti
Washington Post Foreign Service
Sunday, May 1, 2005

BAGHDAD -- When his lights and television go dark, as they regularly do, Khalid Qasim Ali flips a switch in his living room to bring back the power. This electricity is not state-supplied. Instead, it comes from a generator three blocks away that is connected to Ali's home by a wire strung in the air.

All told, 107 families in Baghdad's working-class neighborhood of Topchi are hooked up to the generator. The arrangement gives them power during the long blackouts that are routine in Iraq. It also darkens the skies over Topchi with a tangled skein of unsightly, dangerous cables. Like everyone else, Ali is billed by the ampere. He pays the generator's owner around $10 a month.

"We should enjoy electricity without using a generator because Iraq is a wealthy country," said Ali, a 65-year-old retired truck driver. "Regretfully, the Americans did nothing since they came."

Thousands of roaring generators in Iraqi back yards, driveways and street corners demonstrate that after two years and at least $1.2 billion, the U.S. effort to resuscitate Iraq's electrical system is still very wide of its mark. In fact, the national grid's average daily output of 4,000-4,200 megawatts falls below its prewar level of about 4,400 megawatts.

The shortage is a huge source of public anger and dissatisfaction, as seen in a recent poll by the International Republican Institute, a U.S.-funded nonprofit organization that promotes democracy. Asked what the government's priorities should be, Iraqis put "inadequate electricity" first, ahead of "crime," which was fourth, "the presence of coalition forces," which ranked seventh, and "terrorists," which ranked eighth.

Nothing has done more to puncture Iraqis' once-widespread belief in Americans' technological superiority and power than their inability to quickly revive the power system, vital for Iraq's oil industry. And perhaps nothing has frustrated U.S. reconstruction officials more than that failure.

There are many reasons for the slow pace, from flawed planning by the U.S. early on, to continuing sabotage by insurgents. In addition, with the establishment of an interim government in June, U.S. officials said they had to work more closely with Iraqi electricity officials who were not always as efficient or as willing to take on responsibility as the Americans had hoped.

Now, as Iraq's first democratically elected government assumes power, U.S. officials insist they are only playing a supportive role in rebuilding Iraq's electricity sector. The country's civilian leaders, they say, are responsible for bringing reliable power to Iraq's 26 million people, a task experts estimate will take years and require billions more dollars.

"It is the government of this country who is going to provide electricity. The Americans don't provide electricity," William B. Taylor, director of the U.S. Embassy's Iraq Reconstruction Management Office, said in an interview. "The government is going to get the credit and they're taking the responsibility, and they're doing a good job. They've got some problems. We're helping them as much as we can. We got a lot of money we're putting into this. And we have a lot at stake here. We want them to succeed. We want them to be able to provide electricity to their people."

With a scorching summer approaching, Iraqi and U.S. officials are worried about the shortage. A brisk consumer goods market has put more refrigerators and air conditioners in Iraqi homes than ever, leading U.S. officials to forecast that peak daily demand in the 100-degree days of July and August could go up to 8,000 to 8,800 megawatts.

Although current output averages 4,000 to 4,200 megawatts, the level on many days is lower because of unplanned outages or shutdowns for scheduled maintenance. During the second week in April, for example, average output was 3,517 megawatts, according to the Iraq Index, which is compiled by the Brookings Institution's Saban Center for Middle East Policy.

"I have concerns about this summer," said Rick Whitaker, who oversees power-related projects in Iraq for the U.S. Agency for International Development. Whitaker estimated that by midsummer, the national grid might be able to produce "slightly less than 6,000 megawatts daily peak."

Electricity "is a huge issue in every province," said Mohammed Musabah, governor of Iraq's southern city of Basra, where riots broke out in the summer of 2003 to protest lengthy power cuts. Musabah gets a daily report on power production and frequent visits from Maytham Wasfi, assistant general director for power distribution for southern Iraq.

"We want people to understand," Wasfi said recently, "the situation of electricity this summer is going to be worse than last summer."

'A Rusty Old Car'

American expertise, Iraqi ingenuity and U.S. taxpayer dollars were supposed to have rapidly resurrected Iraq's electrical grid. What went wrong?

Even before the U.S. invasion, Iraq's power system did not produce enough power to meet demand, which ranged from 3,000 to 6,500 megawatts, depending on the weather. Before March 2003, average output was 4,400 megawatts, according to the Brookings' Iraq Index.

Former president Saddam Hussein drained power from other parts of the country to serve Baghdad. U.S. occupation authorities ordered that the burden be equally shared, and the routine almost everywhere has been three hours on, three hours off.

During the summer of 2003, U.S. officials spent about $230 million on emergency repairs and brought grid production back to around 3,500 megawatts. In the fall, they launched a campaign to increase output to 4,400 megawatts by midwinter, concentrating on repairs and purchasing spare parts. When that succeeded, they set a new goal: Reach 6,000 megawatts by June 1, 2004.

"The mantra was 'megawatts on the grid,' " recalled a senior U.S. Embassy official involved in reconstruction who could not be identified under embassy ground rules. "We didn't make it."

By this point, U.S. officials knew that they had initially failed to grasp how fragile the network was. Decades of poor maintenance, the U.S. bombing of Iraqi infrastructure in 1991, more than a dozen years of harsh economic sanctions and postwar looting in 2003 contributed to a state of severe dilapidation not fully recognized at first.

"It was like trying to restore a rusty old car on a farm some place," said the embassy official. "You repair it when you really should have started from scratch. But we didn't have the time or the money to do that."

It was a misjudgment that still bedevils the U.S. effort, according to the latest report on U.S. reconstruction delivered to Congress in April. The report said the "original estimate of the damage done to the basic infrastructure from decades of neglect and warfare was significantly underestimated," and as a result, "more time and resources are required to stand-up and maintain systems than originally thought."

Another major drag on increasing the grid's output has been insufficient fuel supplies. The favored fuels are either natural gas or diesel. But because Iraq does not produce enough diesel and has little natural gas, it has been substituting other fuels. The substitutes make generators less efficient. State Department figures released in mid-April, for example, indicate that nearly 1,000 megawatts are "currently offline in unplanned outages" and that 341 of those are "due to insufficient fuel supplies."

But perhaps the biggest constraint has been the insurgency, which Whitaker called "a big wet blanket that's thrown over the projects. It's a big decelerator." In a dramatic example, a huge, German-made 260-megawatt combustion turbine generator for Kirkuk power station sat in Jordan for at least six months until U.S. military and civilian officials could organize a convoy to bring it unscathed through insurgent territory.

"Security continues to be a destabilizing factor, leading to project delays and cost increases," the recent update to Congress stated. Sabotage to an oil line has delayed the addition of two combustion turbine units at Baiji power station, it noted. And at the Baghdad South power plant, where 21 workdays were lost because of a mortar attack and the murder of two Iraqi engineers, installation of two new generators will be delayed several months.

The insurgency has also sharply raised security costs for U.S. corporations working in the electrical sector. For example, an ongoing project to install two huge generators at a power station in Kirkuk involves 323 mostly foreign employees who live on-site. Of those workers, 141 provide security for the rest.

"Every month, costs were going up," the embassy official recalled. "And we'd have weeks with no work getting done."

After U.S. occupation officials transferred political authority to an Iraqi interim government in June, the U.S. Embassy's Iraq Reconstruction Management Office took over the rebuilding effort from the Pentagon.

The relationship between U.S. and Iraqi officials then changed -- they became more like consultant and client, as the embassy official put it. And different kinds of problems surfaced, including "a general resistance by some Ministry personnel to accept responsibility for managing and operating power stations," said the recent report to Congress.

"There's an apathy within the plants," Whitaker said. "They haven't grabbed it and said 'good.' "

Taylor and Whitaker blame the lethargy on years of working in a system in which the fear of punishment reduced individual initiative. "When you made a mistake under Saddam Hussein bad things happened to you," Taylor said. "There was not an incentive . . . to take responsibility."

An Iraqi businessman, Khalid Baderkhan, whose firm manages electrical construction projects, offered another explanation. Many ministry employees, he said, are holdovers from the Hussein government who got their jobs through patronage and see change as a threat. As products of a state-run, socialist economy, he added, they lack modern management skills, and do not appreciate the importance of costs, schedules and quality control.

"As long as people in control of the ministries are the old guard who act like mafias and are controlling all management and financial dealings," it will be difficult to make headway in improving the power system, said Baderkhan. "If they don't benefit" from a new project, he said, "they will block it."

Reconstruction chief Taylor said poor information plagued the effort from the start. "Everyone assumed that the plant and equipment just needed some work." he said. "Well, it turns out it needs a lot of work. We assumed the Iraqis could and would take care of it and that's proven to be a wrong assumption."

U.S. officials moved millions of dollars designated for electricity improvement to the Oil Ministry to facilitate projects needed by power plants, such as improving a natural gas line from the southern oil fields. But the Oil Ministry moved slowly or not at all on these projects, the embassy official said.

There have also been "delays caused by the transition" to a new Iraqi government, the report to Congress stated. In the three months since the Jan. 30 election, construction projects, major new contracts and government reorganization were put on hold until a new government was formed.

Billions More Needed

During a review of U.S. reconstruction spending last year, about $1 billion was diverted to security programs from the $5.5 billion that Congress had allocated for electricity improvement in late 2003.

Of the $4.3 billion still currently assigned to the electric sector, $961 million had been spent as of mid-April, according to the latest State Department figures. With the $230 million spent on emergency repairs in 2003, the total outlay so far is at least $1.2 billion. Another $2.9 billion is currently under contract, the figures show.

Last year, a joint United Nations and World Bank study estimated that restoring Iraq's power sector would cost $12 billion through 2007. That will require international investment, which is likely only after drastic improvement in security and legal reforms, experts say.

Despite their ubiquity, generators are beyond the family budget for millions of Iraqis. "It is too much for a family with one breadwinner," said Um Abeer, who lives in Topchi with her brother and daughter in a tiny house with cracked walls and, during a recent visit, no power.

"We are tired from just thinking of the coming summer," Um Abeer said, adding, "I am confident that the new government will not listen to the Americans and will start depending on the Iraqi experience to return the power back."

Electrician Ahmed Abdul Sahib, however, said the Americans still have a big role to play. "They occupied Iraq so they are responsible," said Sahib, 43. "If they are making Iraq a model for democracy, they must make things go well. Others will not welcome American democracy if they see Iraq in this situation."

Correspondent Anthony Shadid contributed to this report.

© 2005 The Washington Post Company