2 July 2003—Nobody needs to be told that the reconstruction of Iraq is a highly charged subject, with huge human, political, and financial interests at stake. Obviously, the immediate welfare of all persons living in Iraq depends almost entirely on how well the job is done, and in the longer run, so will prospects for self-government and healthy relations between Iraq and the victor countries. At the same time, the way the job is done will have an impact on relations between the victors and the many more countries that proved unwilling to join the ”coalition of the willing.” And those relations, in turn, will have important effects on the availability of funds to support reconstruction work and on the work itself.
The decision by the Bush administration to rely heavily on private contractors, and to put reconstruction work in the hands of companies with which members of the administration have had close ties without open bidding, was controversial from the start. Bechtel National Inc. (San Francisco), the world’s largest engineering contractor, was awarded US $680 million early this year to rebuild Iraq’s electrical grid, water-treatment systems, roads, and schools. It is expected to remain, in effect, the United States prime contractor and perform work that runs into billions of dollars, at least.
Separately, Kellogg, Brown, and Root, a Houston, Texas subsidiary of Halliburton Co. (Dallas), was awarded an ”indefinite delivery/indefinite quantity” contract with a $7 billion cap to extinguish Iraqi oil well fires and then help get the Iraqi oil industry back on firm footing. Halliburton was once run by U.S. Vice President Dick Cheney, while Bechtel’s leadership has boasted former Republican cabinet members like George Schultz and Caspar Weinberger, secretaries of state and defense, respectively, under Ronald Reagan.
Perhaps because of the ongoing criticism over the no-bid contracts and a looming Congressional inquiry, the U.S. Army Corps of engineers announced on 27 June that it is ending the Halliburton contract. The agency plans to solicit bids for two contracts to repair Iraq’s oil fields.
The scope of the contracts—one for northern Iraq and one for the south—has yet to be defined. As a result KBR, which just complete $235 million-worth of work, will, at best, get half of the oil field work. The Corps of Engineers plans to award the contracts, whose value could reach $500 million each, to two separate firms.
The United States Agency for International Aid (USAID, Washington, D.C.) retains overall authority for reconstruction work, and no projects subcontracted by Bechtel can proceed without an approved job order from it. Bechtel has said it expects to farm out 90 percent of the reconstruction work, while itself handling the repair of 50 bridges and more than 1000 schools, medical facilities, and water-treatment plants. Though Bechtel says 3000 subcontractors from across the globe showed up at information sessions it held in Washington, D.C., London, and Kuwait City, Kuwait, only 16 contracts had been awarded by mid-June. Of the 7800 firms that had requested work in Iraq by then, more than 2800 were U.S.-based.
The contracts let to date mainly have been to make Iraq’s airports and its only deep-water seaport serviceable so that the million tons of food expected to arrive in the country by September at the behest of the United Nations, not to mention materials for the rebuilding effort, can be handled with as few complications as possible. Of these contracts, only one was awarded to an Iraqi firm. The al-Bunnia Trading Company (Baghdad) won a $5 million contract to rebuild a 1.6-km-long bridge destroyed during the war. The rest of the contracts have gone to U.S., British, Saudi, and Kuwaiti companies.
Meanwhile, the United States has come under mounting pressure from other countries to be balanced in awarding the contracts. A 25 June Washington Post story noted that potential donors to the reconstruction effort are privately demanding that the United States make clear its plans for Iraq’s oil revenue and guarantee more opportunities for foreign companies. Countries like Germany and France, which opposed the war, have intimated that contributions toward the cost of reconstruction would be slow in coming if they are shut out of the process.
One top priority: electricity
With summer temperatures at a scorching peak, and Iraq’s major cities desperately short of electricity for air conditioning and water pumping, as well as for cooking and lighting, the task of repairing and bolstering Iraq’s power grid has to be counted among the most urgent. In recent days and weeks, most residents of Baghdad have been without electricity most of the time, while temperatures (in Celsius) have been well into the thirties—above 100 degrees Fahrenheit—much of the time.
Generally, Bechtel has been tight-lipped about many of the specifics of the reconstruction plan. But on 27 June, Mike Robinson, Bechtel’s program manger for power, told IEEE Spectrum that the Iraqi Electricity Commission is attempting to add 4000 MW of generating capacity to the grid by the end of July. The plan, he said, is to continue increasing output until there is at least 5 percent reserve capacity nationwide.
Robinson noted that, in his estimation, Baghdad needs about 1700 MW to meet current peak demand, but at the moment has an active capacity of only 1200 or 1300 MW, at best. As the summer heat gets worse, the Bechtel engineer said, ”They can expect that each additional degree [will add] an extra 70 MW of additional use.”
For years, Baghdad consumed far more power than it generated, relying on power imported from other regions of the country. While Baghdad usually received 20 hours of electricity a day, areas the government considered less important got four or five hours of power. Now, as Baghdad struggles to keep the lights on, the destruction of the transmission towers that once allowed it to consume 60 percent of the nation’s generating capacity has left the capital city without a lifeline.
On 26 May, Engineering News-Record (a construction industry weekly published by McGraw-Hill in New York City) reported that some generating facilities in southern Iraq had been put back online. But, Yarub Jasmin Ahmed, managing director of the state-owned Southern Electric Co., told the publication that damage to transmission lines between Basra and Baghdad means that electricity generated in the south had to remain there. Southern Electric operates power plants producing a total of 1732 MW. However, with 40 of the company’s 400-kilovolt transmission towers and 25 of its 132-kV towers having sustained damage during the war with the United States and Britain—and, more recently, from attacks by looters and saboteurs—it is in no position to provide power to the capital city.
Fighting for power, in both senses of the term
Bolstering the grid enough so that the average Iraqi can take a reliable supply of electricity for granted would be a challenging and expensive proposition even in stable times. But the lack of law and order has made ”standing up” the nation’s infrastructure almost impossible.
On 20 June, the Washington Post reported that ”in April, when [engineers from Bechtel] first set out to assess the damage to Iraq’s transmission towers on the southeastern leg of a line from [Al] Qurnah to Al Kut, [they] found 13 towers knocked down by looters in search of copper, aluminum and steel. A month later, [they] discovered 52 more towers had been destroyed.”
On 21 June, The New York Times reported that dozens more had been toppled, and that in Al Falluja, a town 50 km west of Baghdad, a transformer was destroyed by a rocket-propelled grenade, leaving nearly half of its 75 000 residents without electricity. Bechtel’s Robinson considers such vandalism ”a combination of organized resistance and opportunism.”
The 20 June Washington Post report discussed leaked internal memos from companies working in Iraq that point to organized looting and smuggling operations targeting the grid. According to one report cited in the story, more than 500 tons of copper, aluminum, and steel stolen from transmission towers is smuggled across the Iranian border daily. Where is this metal coming from? The Engineering News-Record reported on 26 May that 50 km north of Basra, looters used an acetylene blowtorch to cut down a tower supporting a132-kilovolt transmission line. Vandals, say Iraqi engineers, rely on smelting plants to turn the stolen copper wires and steel support structures into brick-like bars for transport to Iran.