Delays in Iraq reconstruction criticised, scale of work played down

16 May 2003
Companies pursuing opportunities in the Iraq reconstruction programme say initial reconstruction work is being delayed by worries in Washington about possible complaints of favouritism in the award of contracts. There are also growing doubts about the scale of initial rebuilding work, which may focus solely on damage done during the US-led invasion.

The US government has budgeted to spend more than $2,400 million on reconstruction in a programme managed by the US Agency for International Development. A further amount worth under $500 million has been allocated for repair and rehabilitation work in the Iraqi oil fields. All nine USAID contracts put out to tender since the end of January have now been awarded and bids are to be called soon for the main repair oil facilities contract being devised by the US Army Corps of Engineers (USACE) on the advice of Kellogg Brown & Root.

Contractors, however, say that they do not expect early awards of major subcontracts, particularly in the capital contract won by Bechtel of the US. 'We have been told that Bechtel's brief is highly limited and that they will be concentrating on damage done in March and April and not before,' says one UK contractor following developments in the reconstruction programme. 'For example, if there is a building with broken windows, Bechtel will only repair the ones damaged in the Iraq war. Reconstruction of buildings and facilities damaged before will be left to future programmes.'

Contractors say that the bidding process being pursued by the USAID and the USACE has drastically slowed the rate at which building work is proceeding. 'They should have just selected qualified companies and told them to get going,' says a contractor. 'Instead, they are going through a lengthy needs assessment process followed by a bidding process which will be competitive. All this is delaying reconstruction work by months.'

Bechtel is holding at the end of May a series of briefing meetings for companies interested in bidding for subcontracts in its programme. This will be followed by a call for bids for selected work. Contractors say they do not expect serious work in the reconstruction programme to start until after the summer.

US undersecretary of state for economic, business and agricultural affairs Alan Larson hinted that initial reconstruction may be more limited than originally believed in testimony before the US house international relations committee on 15 May. 'There was remarkably little new damage to Iraq's civilian infrastructure as a result either of coalition military action or the deliberate actions of Saddam's regime in its way out of the door,' he said.

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