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WAR WITH IRAQ / PLANNING THE AFTERMATH

U.S. Agency Offers Blueprint for Rebuilding Iraq

Its cost is still unclear, but the plan will mean lucrative contracts for a few American firms.

March 21, 2003|Mark Fineman | Times Staff Writer

WASHINGTON — The Bush administration Thursday unveiled a blueprint for Iraq's eventual reconstruction, calling it America's most massive rebuilding project since the Marshall Plan.

In the coming days, a handful of American companies will win huge contracts worth hundreds of millions of dollars -- billions, some say -- to repair some of what the U.S. war destroys and what Iraqi President Saddam Hussein already has ruined, according to Andrew S. Natsios, administrator of the U.S. Agency for International Development.

The development agency contracts cover everything from rebuilding Iraq's roads, hospitals, schools, airports, seaports, power plants and water and sewage systems to creating local governments, managing public health and feeding Iraq's 24 million people, Natsios told a small group of reporters Thursday.

In addition, more than half of the agency's disaster-response team -- its largest ever -- already has taken up positions with U.S. combat troops in Kuwait. The team members will facilitate and contract for the distribution of food, shelter, water and emergency medical kits on the ground as U.S. forces move in and secure Iraq.

And late Thursday, development agency and Agriculture Department officials announced that the administration would release 500,000 tons of food from the U.S. strategic wheat reserve for the Iraqi people.

All told, Natsios said, it would be the agency's largest undertaking.

"I am not aware of anything of this scale since the Marshall Plan," he said, referring to America's assistance to post-World War II Europe. Between 1948 and 1951, the United States provided roughly $13 billion in economic and technical aid.

What Natsios said he could not provide during the briefing is the price tag, deferring to the White House all questions about how much the projects ultimately could cost American taxpayers.

For now, the operation is being launched with $304 million in the development agency's general appropriations. The rest will be in a multibillion-dollar supplemental spending bill for the war and homeland security that the White House is expected to submit to Congress next week.

The agency contracts do not include some of the most potentially costly -- and lucrative -- reconstruction work: billions of dollars to rebuild and run Iraq's oil industry, put out oil fires and reform the Iraqi army and police.

Those contracts, Natsios said, will be awarded by the Pentagon, whose chief interim civil administrator for Iraq, retired Army Lt. Gen. Jay Garner, will also supervise the staffing of interim Iraqi government ministries.

Citing national security and other government restrictions, Natsios said that only U.S. companies were being asked to bid on the prime development agency contracts in Iraq.

But he stressed that he signed a waiver allowing the prime contractors to subcontract work to companies from "any country in the free world."

He added that 50% of the business would go to subcontractors.

At the moment, though, that waiver would not allow subcontracts with companies in Iraq, which is on the list of nations that sponsor terrorism.

Natsios said he expects Iraq will be taken off the list if and when its Baathist regime falls, paving the way for some of the vast reconstruction sums to move into the Iraqi economy.

"We will buy things in the local markets," he said.

But, as the first of the bombs and missiles fell on Iraq and reports of Iraqi oil fires spread, Natsios and other development agency officials made it clear that no one knows how much reconstruction will cost because no one knows the extent of the destruction that lies ahead. And much of that depends on the length of the war.

"We have absolutely no idea if this will go very quickly," said Tim Beans, the development agency's head of procurement.

Even the yet-undisclosed price caps included in contract solicitations that went to selected U.S. firms last month, he said, are just estimates.

"Will it grow?" he said of the contracts' cost. "The possibility exists that it will grow."

The first substantial contracts, which will determine the future management of Iraq's international airports and seaports, are to be awarded today, he said.

Candidates for the largest of the contracts, a $600-million commitment to rebuild much of Iraq's civilian infrastructure, have been narrowed down to two companies from an original seven. That will be awarded next week, Beans said.

As for the duration of the first major phase of the reconstruction, Natsios said, "We've been given a time frame to think about ... a 12-month period."

But again, he added, nothing is certain.

The damage the U.S. intends to repair, he said, is not limited to what the war will wreak.

"It is a damaged society psychologically after 35 years" under the ruling Arab Socialist Baath Party, Natsios said.

"This is not your garden-variety dictatorship. This is more like Stalinist Russia or North Korea."

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