Bechtel's Projects Lacking In Iraq
Thursday, July 26, 2007
A government oversight agency has found that Bechtel National successfully completed less than half of the reconstruction jobs that the government hired it to perform in Iraq.
In a report released yesterday, the Special Inspector General for Iraq Reconstruction analyzed 24 job orders that Bechtel contracted to perform at a total direct cost of $761.2 million. Of those, 11 were successfully completed, 10 were incomplete, canceled or transferred to someone else, and the final status of 3 could not be determined.
"This is emblematic of the problem that contractors have experienced in Iraq reconstruction," said Stuart W. Bowen Jr., the inspector general for Iraq. He said his office has found that 40 percent of projects in Iraq were in danger of not being completed under the original contract.
"When you enter a contract, you expect the work to be done," Bowen said. "If half the job orders aren't met, you didn't get what you bargained for."
"It has been typical for [contractors] to have projects delayed because of security or delays by subcontractors," he said. "That's why virtually every project in Iraq has cost more or taken longer than expected, and as is the case with the Bechtel contract, some projects didn't get finished at all."
Bechtel was hired under a $2 billion contract to provide engineering, procurement and construction services and to rebuild infrastructure in Iraq. The report pointed out that Bechtel did finish several of its costliest undertakings, including an $88.4 million project to do maintenance work, provide spare parts and train Iraqis at 19 power plants, and a $126.5 million project to build and refurbish electrical substations.
Among the jobs that Bechtel did not successfully complete was one to build a landfill in Baghdad. After security problems and troubles with the land's ownership arose, the $3.7 million job was canceled. Bechtel was paid for its work, and $2.6 million worth of equipment was turned over to the Iraqis.
"We couldn't find an adequate site for the landfill," said Bill Shoaf, program director for Bechtel's work in Iraq. "It was determined the most beneficial use was for Bechtel to turn over the equipment. We had gone through all the options, and it was difficult finding a suitable site. So in time, the job order was amended."
Bechtel started work on a new $24.4 million water-treatment plant in Baghdad's volatile Sadr City district but did not finish the job. The company turned the project over to the U.S. Army Corps of Engineers after completing 88 percent of the work.
In another case, Bechtel did not finish building a children's hospital in the southern city of Basra because of security threats. The hospital, championed by first lady Laura Bush, was supposed to provide state-of-the-art care. Bechtel transferred the hospital to the Corps of Engineers after completing 45 percent of the work.