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Coalition Seeks $350 Million to Fix Iraqi Water, Power Systems

August 29, 2003|David Streitfeld | Times Staff Writer

Iraq's power and water systems, already the subject of a concerted U.S. rehabilitation effort, are in such poor shape that U.S. civil administrator L. Paul Bremer III is pressing for an additional $350 million to fix them.

The size and the urgency of the request underline how crucial a functioning electrical grid is to the stability and health of Iraq and how distant that prospect has become.

Even the straightforward task of restoring power to prewar levels has proved elusive. In the blazing summer heat, lack of electricity has sparked demonstrations and complaints from Iraqis that ousted dictator Saddam Hussein at least could provide the basics.

Bremer will formally ask the U.S. Agency for International Development as early as next week for an additional $350 million for Bechtel Group, which was awarded a $680-million contract in April to patch up the Iraqi infrastructure, an agency spokeswoman said. The request was first reported by the Wall Street Journal.

If all goes smoothly, the funding process will take about a month.

The money will come from a $2.5-billion reconstruction fund appropriated by Congress in the spring and administered by USAID.

Of the $680 million already awarded, about a third -- $230 million -- was earmarked for power and $45 million for water purification and sanitation.

The plan wasn't to overhaul the country, but merely get it started again. Nevertheless, the money wasn't nearly enough, according to Bechtel officials. One big reason: extensive looting and sabotage.

Lack of electrical power in the southern city of Basra this month helped ignite two days of rioting.

As of last week, both major power lines to Basra were still classified as "nonoperational."

"Over 100 power towers have been taken down and cut up to be sold as scrap metal," said Bechtel spokesman Mike Kidder.

"Some generators at power plants or other sites have been set afire to burn the insulation off," he added. "Then the copper wires are sold on the black market."

USAID says power is at 75% of prewar levels. It hopes to get back to 100% by Oct. 1.

More extensive repairs -- estimated by Bechtel at $6 billion and by others even higher -- are expected to be undertaken by a new Iraqi government and paid for by oil revenue. But establishing that government and restoring oil production are both behind schedule.

Bremer has warned in interviews that he'll need billions more to get Iraq going again.

The Bush administration is expected to ask Congress for another supplemental spending bill shortly.

Ellen Yount, a spokeswoman for the development agency, cautioned that Congress must approve the additional funding for Bechtel.

Rep. Henry A. Waxman (D-Los Angeles) has criticized the way the rebuilding money has been doled out, saying there has not been enough competition or public disclosure.

"This is not the way to protect the interests of the American taxpayer," Waxman said through a spokesman.

Bechtel was invited by USAID to bid on the April contract, as were a handful of other companies. In another case, Halliburton Co. was given a Pentagon contract without any competitive bidding at all. Halliburton's work on the Iraqi oil system, initially described by government spokespeople as very limited, has exceeded $700 million.

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