US agency grants contract before troops gain control

The US Government's aid agency granted a multimillion-dollar contract to manage an Iraqi port town - well before American or British forces confirmed control.

USAID awarded Stevedoring Services of America a $US4.8 million ($8.79 million) contract to run operations at Umm Qasr.

The contract was the second awarded under the Bush Administration's preparations for reconstruction in Iraq, where US and British forces are fighting to overthrow the Government of Iraqi President Saddam Hussein.

Reports last week said the Government had lost control of Umm Qasr, Iraq's main deep-water port at the head of the Gulf, but there has been been stubborn remaining resistance.

Earlier yesterday 100 Saddam loyalists were reportedly still holding out there. Polish special forces joined British troops in the fight.

But last night Brigadier Jim Dutton, commander of the British Royal Marines' 3rd Commando Brigade, said the port was now "safe and open".

He hoped the first ship bringing aid to Iraq would arrive within 48 hours.

USAID said Stevedoring Services of America would be responsible "for the effective operation of the port, allowing food and other humanitarian and reconstruction materials and supplies to be delivered smoothly and efficiently".

"The Seattle, Washington-based company will provide an initial port assessment, develop improvement plans to overcome port-imposed constraints, and supply technical expertise to ensure an adequate flow of through shipment.

"The company will be responsible for the port pilots who will guide ships up the channel, and will manage the access of trucking companies to the port and establish a system of controls to avoid theft and corruption." As part of the preparations for reconstruction, the US Government has invited at least five large engineering companies to submit bids for a contract which could be worth up to $US900 million, US and company officials said this month.

The winning company would repair Iraqi health services, ports, airports, and schools and other educational institutions, they said.

A US official said that USAID would probably announce the winner of the contract tomorrow.

British companies have complained that they were not invited to send in bids for that contract but the USAID official said they would be eligible for subcontracting work.

- REUTERS

Herald Feature: Iraq