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Oil's Promise Still a Dream

A pipeline has given Chad hundreds of millions of dollars to fight poverty but critics say corruption and waste have kept the money from those most in need.

July 09, 2006|Edmund Sanders | Times Staff Writer

Kome, Chad — Outside the gleaming white fences of a multibillion-dollar American petroleum complex here, a slum dreams of becoming a boom town.

Thousands of people have flocked to this village in southern Chad over the years, hoping their country's newfound oil wealth would translate into jobs and prosperity. But most remain unemployed, living in huts on garbage-strewn, dirt streets with neither electricity nor running water.

Relations between the village and an ExxonMobil Corp.-led consortium across the street are so strained that oil workers are now banned by their employer from patronizing local bars and other shops in the village. When fire raced through the slum in March, oil company fire trucks watched from the other side of the fence, witnesses said.

"They said our children would get jobs," said Benoit Djimrane Njarounda, who moved to the area more than a decade ago and now serves as the village's chief. "There were so many promises. What happened?"

Three years after this poor, landlocked Central African country joined the league of oil-producing nations, there are growing -- and familiar -- complaints that petroleum money is not getting to those most in need. For most of this year, Chad's oil wealth has been frozen in London bank accounts after a dispute with the World Bank.

As he led an ox across a plot of dirt to plant millet for his family, Joseph Bailessem, 27, lamented that he lacked the skills and education needed for a job at the plant. Worse yet, he said, his children, who were helping him till the soil, are missing out on their education because promised classrooms have yet to open.

"Where is the oil money going?" he asked. "White people are the only ones benefiting."

Just a few years ago, Chad was held up as an international model for how a developing nation could avoid the curse of oil and ensure that money did not disappear into bureaucrats' bank accounts, as seen in Nigeria, Sudan and Gabon.

Thanks to decades of internal strife and its reputation as one of the world's most corrupt countries, this former French colony was unable to attract investment partners to develop its oil fields until the World Bank agreed in 2000 to back a $4-billion deal to build a pipeline from Chad to the Atlantic coastline of neighboring Cameroon.

In return for its participation, the World Bank secured strict conditions on how the Chad government's share of the profit could be spent. Some 10% would be set aside in a "future generations" fund; 72% was earmarked to fight poverty by spending on health, education and roads; 13.5% would go to government coffers and the remaining 4.5% to local communities affected by the development.

By the end of 2005, the government of Chad had received about $420 million, nearly doubling its annual income.

But tracking where the money went is not so simple. A major chunk, more than $74 million in 2005, was allocated for new roads, according to Chad's independent oil oversight committee.

Oil funds helped lay one new toll road to the south and are being used for a 400-mile highway to the east. Still, paved roads remain a rarity in Chad -- three times the size of California -- even in the capital of N'Djamena.

Aside from the new roads, government officials are hard-pressed to describe large-scale benefits of the oil funds. They talk about smaller projects: a new school fence and some renovated classrooms in the capital, HIV testing clinics, a water tower in the southern city of Doba.

Much of the work remains unfinished. Government leaders have urged patience.

"People are complaining because the programs haven't reached them yet, but they will," said Njarindo Milongar, a member of parliament who also chairs the committee that controls money earmarked for communities affected by oil development.

Critics, however, say much of the money is being squandered. Mekombe Therese, vice president of the independent oversight committee charged with monitoring the use of oil proceeds, said her group's analysis of spending in 2004 and 2005 found that 40% to 45% of oil money fell victim to waste, corruption, nepotism, shoddy work or delinquent contractors.

For example, a venture involving the brother of Chadian President Idriss Deby received one of the biggest road construction contracts; committee examiners found a $1-million university grant was being held in the rector's personal bank account; a year after spending $800,000 for three new schools, none had been completed despite a six-month deadline. And new desks provided by another contractor are already falling apart, Therese said.

"The government needs to take action against those who have not fulfilled their obligations, but they are not doing enough," Therese said.

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