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Context of 'May 3, 2006: Iraq Rebuilding Behind Schedule While US Builds World’s Biggest Embassy There'

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Bechtel wins a second contract from USAID to work on rebuilding Iraq’s infrastructure. Work will include the “repair of power generation facilities, electrical grids, municipal water systems and sewage systems; continued rehabilitation or repair of airport facilities; and additional dredging, repair and upgrading of the seaport at Umm Qasr.” The company will also “repair and build government and public facilities such as schools, selected ministry buildings and major irrigation structures, as well as restore essential transport links.” The contract has the potential to be worth as much as $1.8 billion. [US Agency for International Development, 1/6/2004; Financial Times, 1/7/2004]

Entity Tags: Bechtel, USAID

Timeline Tags: Iraq under US Occupation

The US Agency for International Development (AID) announces that it has contracted California-based engineering firm Bechtel Corp to repair and rebuild Iraq’s infrastructure. The contract is worth $34.6 million initially, and up to $680 million over 18 months. Specifically, Bechtel will assess and repair power generation facilities, electrical grids, municipal water and sewage systems, and airport facilities. The company will also dredge, repair, and upgrade the Umm Qasr seaport. Additional projects may include rebuilding hospitals, schools, ministry buildings, major irrigation structures, and the country’s transportation infrastructure. [US Agency for International Development, 4/17/2003] Some experts believe that Bechtel’s contract could ultimately be worth as much as $20 billion. [New York Times, 5/21/2003] The bidding process draws criticism from various congressional Democrats and British companies who say that the process was overly secretive and limited. Only a small number of US-based construction companies were allowed to take part in the bidding. [New York Times, 4/18/2003] The company’s connections to the US government also brings about allegations of cronyism.
bullet Bechtel’s CEO, Riley P. Bechtel, currently serves on the President’s Export Council, which advises the White House on how to create markets for American companies abroad. [New York Times, 4/18/2003]
bullet The company’s senior vice president, Jack Sheehan, is a member of a Pentagon advisory group called the Defense Policy Board, whose members are directly approved by the Defense Secretary. [Guardian, 4/18/2003]
bullet One of its board members is George Shultz, who served as secretary of state under the Reagan administration and who currently leads the advisory board of a pro-war group called the Committee for the Liberation of Iraq. [San Francisco Chronicle, 4/18/2003; Guardian, 4/18/2003]
bullet Daniel Chao, a Bechtel senior vice president, serves on the advisory board of the US Export-Import Bank. [CorpWatch, 4/24/2003]

Entity Tags: Bechtel, USAID

Timeline Tags: Iraq under US Occupation

The US embassy in Baghdad under construction.The US embassy in Baghdad under construction. [Source: London Times]A US Inspector General’s report into reconstruction in Iraq finds that although $22 billion had been spent, water, sewage, and electricity infrastructure still operate at prewar levels. Oil production is also significantly below prewar levels. Task Force Shield, a $147 million to train Iraqi security personnel to protect key oil and electrical sites failed to meet its goals. A fraud investigation is under way to find out why. Less than half the water and electricity projects have been completed and only six of 150 planned health clinics have been completed. By contrast, the US embassy under construction in Baghdad is the only big US building project in Iraq on time and within budget. The embassy, estimated to cost $592 million, will consist of 21 large buildings instead a 102-hectare (42-acre) site, and will be bigger than the small nation of Vatican City. The London Times comments, “The question puzzles and enrages a city: how is it that the Americans cannot keep the electricity running in Baghdad for more than a couple of hours a day, yet still manage to build themselves the biggest embassy on Earth?” [London Times, 5/3/2006]

Timeline Tags: Iraq under US Occupation

A Senate panel finds that billions of taxpayer dollars have been wasted in reconstruction efforts throughout Iraq through fraud, corruption, incompetence, and outright theft. The panel, led by independent Democrat Joseph Lieberman and moderate Republican Susan Collins, say they are considering legislation to create a commission to help fix problems after investigators found confusion and disarray in the four-year-old Iraq reconstruction effort. Lieberman observes, "Where we’ve seen failure is when the US government failed to plan projects carefully and then failed to keep a close watch over contractors and now we’ve seen billions of dollars wasted—a cost measured not just in dollars but in the undermining of the overall US mission in these war-torn countries." Inspector General Stuart Bowen’s latest report on the occupation’s reconstruction efforts found that nearly $400 billion had either been wasted or simply disappeared, though Bowen’s report was careful not to make allegations of outright criminality. Bowen’s report primarily blames confusion, disarray, and incompetence in joint efforts between the rival Defense and State Departments. "Anyone who has spent appreciative time in the Iraq reconstructive effort understands the tension that exists between the two," Bowen says. Bowen’s latest report finds, among other things, that a Defense Department agency charged with running the reconstruction effort never developed a fully coordinated plan upon members’ arrival in 2003, leading to confusion and duplication of effort. "We were bumping into one another as we tried to solve the same problem,” a former agency official is quoted as saying. Money flowed to reconstruction projects before procedures, training and staffing were fully in place, resulting in a "lack of clearly defined authorities" and little accountability in terms of how dollars were being spent. There was little oversight to ensure that Iraqi companies hired to do reconstruction work operated according to international standards. Earlier this year, federal investigators determined that the Bush administration had squandered as much as $10 billion in reconstruction aid in part because of poor planning and contract oversight, resulting in contractor overcharges and unsupported expenses. [Associated Press, 3/22/2007]

Entity Tags: Stuart W. Bowen, Joseph Lieberman, US Department of State, Susan Collins, US Department of Defense

Timeline Tags: Iraq under US Occupation

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