U.S. Neglect Found in Long-Delayed Iraq Hospital Project

By Griff Witte
Washington Post Staff Writer
Saturday, July 29, 2006

The U.S. Agency for International Development failed to adequately monitor a critical hospital project in southern Iraq that ran badly behind schedule and significantly over budget, government auditors concluded in a report released yesterday.

The hospital, intended to be a 50-bed facility that would provide urgently needed medical care to women and children in the city of Basra, was originally supposed to cost the government $50 million and be completed by the end of 2005. But auditors now say the hospital will cost up to $169 million and will not be finished until late next year -- if at all.

Auditors with the office of the special inspector general for Iraq reconstruction found that USAID officials neglected their management of the project and, as a result, repeatedly underestimated how long it would take and how much it would cost.

"Although USAID is responsible for construction of the hospital, it has not included the installation of medical equipment in its estimated project completion schedule or costs," auditors wrote.

As recently as April, USAID was reporting the project to be on time and on budget, even though the contractor, Bechtel National Inc., had by then determined it would actually be 273 days late and $48 million over the expected cost.

The auditors recommended that USAID order Bechtel to stop work on the project.

The project, which has been championed in speeches by Secretary of State Condoleezza Rice and first lady Laura Bush, is just one of many in Iraq that have failed to meet expectations as the U.S. role in reconstruction winds down.

In November 2003, Congress allocated $18.4 billion to rebuild the country, and more than two-thirds of that total has been spent. But many of the projects will not be completed. It will be left to the fledgling Iraqi government to pick up the reconstruction process where the United States leaves off.

Rebuilding has been hampered from the beginning by a lack of trained U.S. government officials in Iraq to oversee the work of contractors. Auditors yesterday reported that USAID relies on one contracting officer and one technical officer to oversee 20 projects across Iraq that together are worth $1.4 billion.

In a response to the report, the U.S. Embassy in Baghdad said Ambassador Zalmay Khalilzad has "directed that action be taken to get the project back on track." Officials with Bechtel, which is being dropped from the project, did not immediately return phone calls last night seeking comment.

A representative of Bechtel told the New York Times, which reported problems with the hospital in yesterday's editions, that security problems had hampered the company's progress.

In other findings related to Iraq's reconstruction issued yesterday, auditors found that:

· There is no overall plan for transferring U.S.-initiated reconstruction projects to Iraqi government control and no schedule for when they will be completed.

· A planned first-responder network -- intended to allow Iraqis to call for help in the event of emergency -- is ineffective because of communications problems that prevent most dispatch centers from receiving calls from civilians. By the end of the year, more than $218 million will have been spent on the program.

· The United States has devoted little time or money to a program aimed at rooting out corruption in the Iraqi government.

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