Much Undone In Rebuilding Iraq, Audit Says

By Andy Mosher and Griff Witte
Washington Post Foreign Service
Wednesday, August 2, 2006

NASIRIYAH, Iraq, Aug. 1 -- A flailing Iraq reconstruction effort that has been dominated for more than three years by U.S. dollars and companies is being transferred to Iraqis, leaving them the challenge of completing a long list of projects left unfinished by the Americans.

While the handover is occurring gradually, it comes as U.S. money dwindles and American officials face a Sept. 30 deadline for choosing which projects to fund with the remaining $2 billion of the $21 billion rebuilding program. More than 500 planned projects have not been started, and the United States lacks a coherent plan for transferring authority to Iraqi control, a report released Tuesday concludes.

In some cases, Iraqis are having to take over projects from American construction firms that were removed from jobs because of poor performance. For example, in Nasiriyah, about 300 miles southeast of Baghdad, the Iraqi firm Al-Basheer Co. was recently given a prison-construction contract that a huge American conglomerate, Parsons Global Services Inc., lost. Parsons was six months overdue with the project and had completed only a third of the job.

"This is the fourth quarter" of the U.S.-led reconstruction, said Stuart W. Bowen Jr., special inspector general for Iraq reconstruction, whose office is issuing the report. "The Iraqis are going to have to develop their own system."

As the handoff proceeds, there are questions about exactly what it is the Iraqis will inherit and how a government plagued by corruption can restore confidence in a rebuilding program that has been dogged by corruption allegations from the start.

Bowen's report makes clear that while the rebuilding campaign has achieved some successes, hundreds of jobs remain incomplete and many key projects hang in limbo.

The United States has completed 82 percent of its planned projects, having spent $15 billion. Those funds have brought oil and electricity production above prewar levels. They have given 5 million more people access to sanitized water. And they have paid for more than 1,200 security facilities such as fire and police stations.

The reconstruction program, though, is also littered with notable failures. A project to create more than 140 primary health-care centers resulted in 20 so far. Baghdad residents still have about eight hours of electricity per day, less than they did before the war, even as power supplies improve in other parts of the country. And a crucial oil pipeline that could have brought the fledgling Iraqi government nearly $15 billion in badly needed revenue remains more than two years behind schedule.

With more than two-thirds of reconstruction funds spent and more than 90 percent already directed to specific projects, reconstruction officials are reckoning with the fact that they will not accomplish all they had hoped. Security costs are a major reason why, but Bowen's office has reported that mismanagement and poor planning also played a role.

Some projects will be left for the international community to fund or for the Iraqi government to finance with oil revenue. The United States will continue to spend money on reconstruction in Iraq through the U.S. Agency for International Development, but the flow of funds in future years is expected to be a fraction of what it has been.

To lawmakers, the U.S.-directed reconstruction has fallen well short of expectations.

"This story is a very disappointing one. Everywhere you look, goals have not been achieved," said Sen. Susan Collins (R-Maine), who will hold a hearing on the reconstruction today. "I don't think we can ever get back the billions of dollars that have been lost to poor planning, outright fraud and corruption."

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