Reconstruction chaos as US cash runs dry

WASHINGTON - A Government report has highlighted the chaos of Washington's post-war reconstruction programme in Iraq, hamstrung from the start by inadequate staffing, bureaucratic in-fighting and ever mounting security costs.

The document by the programme's official watchdog seems likely to add to mounting pressure in the US for the Bush Administration to extricate itself from Iraq, financially and militarily.

Since the March 2003 invasion, the Bush administration has allocated US$21 billion ($30.7 billion) to rebuilding the country, of which at least US$18 billion has been allocated.

But, according to reports, the White House will ask for no further funds in the budget request for the fiscal year starting next October, signalling its intention to wind down spending.

The report, leaked to the New York Times, confirms a picture that has long been obvious. Despite every effort, Iraq's oil, electricity and water industries struggle to return to pre-war levels of output, hindered by poor organisation, Government power feuds and attacks by insurgents.

Security now routinely swallows up a quarter or more of total spending.

But the document says problems began even before the war started. In November 2002, the US Army spent US$1.9 million on a contingency plan should Iraqi forces sabotage the country's oil installations - as they had done in Kuwait in February 1991.

That planning task was entrusted to Kellogg, Brown and Root, a subsidiary of Halliburton, once headed by Vice-President Dick Cheney.

After the war, KBR was awarded the US$1.4 billion no-bid contract to restore Iraq's decrepit oil industry. Thereafter Halliburton and KBR featured in a series of controversies over mismanagement and cost overruns.

Making matters worse, reconstruction planning before the war was deliberately kept very secret, the report says, "to avoid the impression that the US Government had already decided on [military] intervention."

This meant the occupation authorities had too few specialists and few detailed plans when they took over.

The difficulties were only exacerbated by constant feuding between the State Department and the Pentagon, placed in charge of reconstruction.

The latter clung to the assumption, stated by former Deputy Defence Secretary Paul Wolfowitz, that Iraq's oil would pay for reconstruction.

Instead, says the report, David Nash - who led the early rebuilding effort - and his staff quickly realised they would need a far larger sum, up to US$100 billion over several years, if rebuilding was to succeed.

"No matter how we pared the list, we needed US$20 billion more than we had," Nash is quoted as saying.

Every sign is that no more reconstruction money will be coming from public coffers, beyond the small sums available for US commanders in Iraq to disburse on their own initiative.

"The US never intended to completely rebuild Iraq," Brigadier General William McCoy, commander of the Army Corps of Engineers which currently heads the efforts, said.

Meanwhile on the home front, disillusion and impatience has only grown. In Congress, pressure is growing for an end to a military occupation costing US$5 billion a month.

A Senate resolution last autumn, while opposing immediate withdrawal of the 140,000-strong US force, said that 2006 must be the year in which Iraq started to take control of security.

Even President George W. Bush has admitted too much money was directed at large infrastructure projects, and not enough at small-scale ventures that could have made a difference. The message is clear: henceforth foreign donors and the new Baghdad Government will have to pay for reconstruction.

- INDEPENDENT