Projects in Iraq to Be Reevaluated
WASHINGTON — The State Department has ordered a major reevaluation of the troubled $18.4-billion Iraq reconstruction effort, blaming problems on early decisions to hire U.S. firms for major infrastructure projects.
In a report to Congress this week, the department says rebuilding officials will cancel several planned water and electricity plants and shift $832 million to focus on immediate job creation and training for Iraqis.
The new approach will also place a strong emphasis on spending remaining funds to contract with Iraqi companies, which have experienced fewer problems with insurgents and have lower overhead than U.S. multinational firms.
"Changing conditions meant that the cost and time necessary to start and complete activities increased dramatically, requiring a significant and ongoing reevaluation of" the rebuilding plan, the report says.
The report, along with an earlier draft obtained by the Los Angeles Times, offers the most sweeping analysis to date of the failures in the reconstruction process and presents the most detailed road map yet for the future of the program.
The adjustment, the third such funding change in nine months, is the latest sign of disarray in the effort to help quell the insurgency by improving living standards and providing jobs for Iraqis.
The report lists problems with the performance of some firms, including Houston-based Halliburton Co. The report reveals that the U.S. issued a warning to KBR, a Halliburton subsidiary, in January, threatening possible termination on its $1.2-billion oil industry reconstruction contract.
Bill Taylor, who heads the civilian reconstruction management office in Iraq, which wrote the report, said remaining funds would increasingly be focused on "systems" rather than individual projects. Iraqis have been frustrated, for instance, that new water treatment plants have been built without new water lines, resulting in millions of gallons of clean water that has no way to reach homes.
"When the facts on the ground change, you have to make some adjustments," Taylor said. "That's what we've been doing."
The draft version of the report comes to nearly identical conclusions but is more candid in spelling out problems with the reconstruction. It lists several assumptions made by the Pentagon that it says proved incorrect.
