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U.S. Report Cites Progress, Shortfalls In Iraq Rebuilding

By Jonathan Finer
Washington Post Foreign Service
Monday, May 1, 2006

BAGHDAD -- The U.S. official overseeing Iraq reconstruction funding -- whose recent audits have detailed a wide gap between the promise and result of rebuilding efforts -- said in a report published Monday that officials had made significant strides toward providing essential services to Iraqis.

"Despite certain setbacks, chiefly caused by security problems, the overall picture conveys a sense of substantial progress in the relief, recovery and reconstruction of Iraq," Stuart W. Bowen Jr., the special inspector general for Iraq reconstruction, said in his latest quarterly report.

The lack of basic services has been a source of intense frustration among Iraqis, many of whom have said they expected a substantial upgrade following the U.S. invasion in 2003. Across Iraq, key areas of infrastructure -- such as water and sewage, the oil industry and electricity -- operate at or below prewar levels, according to U.S. officials in Baghdad and previous audits by Bowen's office.

Bowen acknowledged in an interview that three years of reconstruction projects -- paid for largely by more than $18 billion in U.S. funding, most of which has been spent -- had "been punctuated by shortfalls and deficiencies."

But citing Defense Department statistics that showed a 60 percent decline in attacks on Iraqi infrastructure and other facilities in the period since January, he added that "the United States in Iraq is beginning to see the payoff in its investment in security."

The report coincided with the release of an audit that said efforts to protect oil and electrical infrastructure "ultimately proved to be unsuccessful," despite $147 million spent to train more than 20,000 Iraqis to guard pipelines and power plants.

U.S. officials once projected that Iraq's oil industry -- which has access to the world's second-largest oil and gas deposits -- would be lucrative enough to fund the country's reconstruction. But aging facilities and relentless insurgent attacks have kept production from surpassing 2 million barrels per day, below pre-invasion levels. Electricity generation and transmission have also hovered below the country's prewar levels in most regions.

The program to protect oil and electricity infrastructure, dubbed "Task Force Shield," was terminated in April 2005, when Iraq's Defense Ministry was assigned responsibility for the initiative. It awarded large contracts to two private companies, ASARS of Greenbelt and the British security firm Erinys International.

Erinys was tasked with training more than 14,400 guards to protect more than 300 oil facilities and 4,500 miles of pipeline, but the audit found documentation for only 11,400 trainees. It also said it could not account for the whereabouts of thousands of AK-47 rifles distributed to the security force.

The program to protect electrical infrastructure, a contract awarded to ASARS, "barely got underway," the audit concluded, and as a result "only trained a limited number" of the 6,000 guards it had pledged to produce.

"The lack of records and equipment accountability raises significant concerns about possible fraud, waste and abuse of Task Force Shield program by U.S. and Iraqi officials," Bowen's audit concluded. It also found indications of fraud that it said are under investigation.

Neither company could be reached for comment Saturday. An article written on the Erinys Web site states that the company built a force of 16,000 oil guards that "stands out as a real, and still relatively little known success story which emerged from the post-conflict security domain in Iraq."

Another audit released along with Bowen's quarterly report showed a gaping shortfall in the number of health clinics built nationwide, a situation described in a Washington Post report a month ago. With $186 million spent, contractor Parsons Global has completed only six clinics and is projected to finish just another 14 of about 150 that had been contracted, the audit said.

Bowen also urged approval of $3.2 billion in additional funding to sustain and support reconstruction proposed by the Bush administration in its recent budget. Far more money will be needed, he said, adding that other countries should be encouraged to boost participation.

Of more than $13 billion pledged by international donors at a conference on reconstruction held in Madrid in 2003, less than $4 billion has been delivered, the inspector general's report said.

"Iraq's neighbors pledged generously at Madrid, but little of the promised funds have yet been expended despite regular demarches by U.S. and other coalition officials," the quarterly report said. Kuwait, Saudi Arabia, Turkey, Jordan and the United Arab Emirates have contributed to reconstruction in various ways, the report concluded, but had not yet met their financial commitments.

Bowen also called for bolstering institutions charged with fighting corruption, which the report called "another form of insurgency in Iraq." In the interview, Bowen said that officials from the Commission for Public Integrity, Iraq's top corruption-fighting body, had told him that of 900 cases reviewed, only about 60 had made their way to the courts.

"The U.S. and international community need to step up and support this," he said. "I am not Pollyannaish enough to believe we're going to remove this stuff rapidly, but mechanisms are in place."

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