Saturday, September 10, 2005

US runs out of money

http://www.guardian.co.uk/Iraq/Story/0,2763,1566176,00.html

Iraq rebuilding under threat as US runs out of money

Rory Carroll in Baghdad and Julian Borger in Washington
Friday September 9, 2005
The Guardian

Key rebuilding projects in Iraq are grinding to a halt because American money is running out and security has diverted funds intended for electricity, water and sanitation, according to US officials.

Plans to overhaul the country's infrastructure have been downsized, postponed or abandoned because the $24bn (£13bn) budget approved by Congress has been dwarfed by the scale of the task.

"We have scaled back our projects in many areas," James Jeffrey, a senior state department adviser on Iraq, told a congressional committee in Washington, in remarks quoted by the Los Angeles Times. "We do not have the money."

Water and sanitation have been particularly badly hit. According to a report published this week by Government Accountability Office, the investigative branch of Congress, $2.6bn has been spent on water projects, half the original budget, after the rest was diverted to security and other uses.

The report said "attacks, threats and intimidation against project contractors and subcontractors" were to blame. A quarter of the $200m-worth of completed US-funded water projects handed over to the Iraqi authorities no longer worked properly because of "looting, unreliable electricity or inadequate Iraqi staff and supplies", the report found.

Both Democrats and Republicans in Congress also said administrative bungling had played a part.

Stuart Bowen, the US special inspector general for Iraqi reconstruction, said he was reluctant to ask for cash immediately after Hurricane Katrina: "It is an issue that we need to address at the right time."

He said non-US sources might be asked to plug the gap.

After Congress approved funding two years ago, oil, electricity, water and sanitation facilities were found to be more degraded than expected. Amid the chaos and corruption of the post-Saddam administration, insurgents also began to target the infrastructure and anyone working for the US or the Iraqi government.

It is in this context that many of the estimated 20,000 foreign security contractors now in Iraq - some paid more than $1,000 a day - are employed. Mr Bowen said $5bn had been diverted to security.

Some areas now get less than four hours of electricity a day, and there has been a surge in cases of dehydration and diarrhoea among children and the elderly. The cost of providing enough electricity for the country by 2010 is put at $20bn.

Fuel shortages have produced mile-long queues at petrol stations. Crude oil production is around 2.2m barrels a day, still below its pre-war peaks, according to the Brookings Institution in Washington.


There have been improvements: the health ministry says the overall rate of disease among children under five has dropped; parts of Baghdad are noticeably sprucer; and thousands of schools have been built or rehabilitated. Electricity generation has recently climbed above pre-war levels.

But the house appropriations foreign operations subcommittee is losing patience.

"It seems almost incomprehensible to me that we haven't been able to do better," said Don Sherwood, a Pennsylvania Republican. Another Republican, the committee chairman, Jim Kolbe, said the Bush administration's vision of stabilising Iraq by funding reconstruction was "a castle built of sand".

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