Efforts to rebuild water, electricity and health networks in Iraq are being shortchanged by higher-than-expected costs to provide security and by generous financial awards to contractors, according to a series of reports by government investigators released yesterday.
(I)n March, the U.S. Agency for International Development canceled two electric power generation programs in order to provide $15 million in additional security elsewhere. On another project to rehabilitate electric substations, the Army Corps of Engineers decided that securing 14 of the 23 facilities would be too expensive and limited the entire project to nine stations. And in February, USAID added $33 million to cover higher security costs on one project, which left it short of money to pay for construction oversight, quality assurance and administrative costs...
Despite $5.7 billion committed to restoring electricity service in Iraq, power generation was still at lower levels as of May than it had been before the U.S. invasion in 2003. In one case, the GAO reported, the United States led an overhaul of an Iraqi power plant but then did not adequately train the Iraqis how to operate it. A widespread power outage resulted.
Crude oil production has also dropped in the past two years, even with more than $5 billion in U.S. and Iraqi funds available for rebuilding. Oil export revenues are needed to fund more than 90 percent of the nascent Iraqi government's 2005 budget, the State Department has said.
None of this should be particularly new. But the excessive amount of money being put into contractors' pockets (whether security or otherwise), combined with resources being cut from the actual programs which could help Iraqi citizens, is only cementing negative perceptions of the occupation. This may not be a problem for an administration which so easily ignores its detractors, but it'll only make life worse for whoever gets to clean up the mess.
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