Iraq Embassy Cost Rises $144 Million Amid Project Delays

While embassy officials have blamed First Kuwaiti for many of the problems and have chafed at restrictions on access to the construction site, another arm of the State Department, Overseas Building Operations, is backing First Kuwaiti. A Sept. 18 internal report on problems with the guard facility's electrical system, prepared for Charles E. Williams, the director of building operations, suggested that KBR, the former Halliburton subsidiary hired to run the facility, was responsible for overloading the system. The facility is "electrically safe and functional," the report said.

Lantos, in his letter, suggested that "significant contractor deficiencies" throughout the complex, including the problems with the guard facility, are responsible for the delays.

In an interview, Lantos said he had been told by a top State Department official that during a recent test of the embassy sprinkler system, "everything blew up." He said he has "very serious concerns" about the project that he intends to raise with Secretary of State Condoleezza Rice when she testifies before his committee this month.

The 32-page State document provided to Congress describes much of work to be funded with the additional $144 million as "follow-on projects" to the original plans. But U.S. officials involved in the construction said the projects are partly the result of new staffing needs and an embassy reorganization that could greatly delay completion of the compound.

Officials said some of the new work is required because Rice reorganized embassy operations this year. A decision to locate Army Gen. David H. Petraeus, the top U.S. commander in Iraq, and his staff in the new embassy will require the conversion of normal office space into a facility secure enough to handle classified material. The reconfiguration of the chancery will cost $14.7 million.

The cafeteria was originally designed for the light duty expected at a typical embassy, where people live in their own apartments and eat only lunch on the job. But now it is being redesigned, at a cost of $27.9 million, to provide three meals a day -- and to be rocket-, bomb- and mortar-proof.

Some officials report that substandard work and extensive problems have been discovered during infrequent site inspections of the new embassy. They suggested the new projects, which apparently will be completed by contractors other than First Kuwaiti, are designed to patch up the existing problems.

While some of the new costs could be covered by an existing supplemental funding request for Iraq, the State document said the department is still searching for ways to pay for nearly $70 million of the additional work.