Saturday, August 05, 2006

The flies lose their taste for honey

According to USAID, The Bechtel Corporation is in the process of "closing out and demobilizing from Iraq." The contracting giant--the giant money-eating-baby of former Reagan Sec. State George Schultz--is not leaving after a job well done. Par example:
A comprehensive U.S. government audit of a Bechtel project in Iraq has exposed gross mismanagement by the company. As a result, the $50 million contract has been canceled. [...] On July 31, the office of the special inspector general for Iraq reconstruction (SIGIR) released an audit of Bechtel's Basra Children's Hospital Project. [...] Bechtel received the contract to build the new hospital in Basra in mid-October 2004 to "improve the quality of care and life expectancy for both women and children." The original price tag was $50 million, and the due date was Dec. 31, 2005. The auditors now estimate that the project will be completed no earlier than July 31, 2007, and will cost as much as $169.5 million (including $30 million for equipment).
Flashback with me a moment to 2003:
The other major contract [i.e. in addition to Halliburton/KBR], for rebuilding Iraq's physical infrastructure, including roads, ports, power stations, telephones, and water supply, was awarded in April to another giant construction company, Bechtel, for $680m (recently increased to $1bn), after a limited and secret bidding process involving just six American firms.
[...] The company vehemently denies it used its connections to win the contact, however, and has said it plans to subcontract out 90% of the work - mainly to local Iraqi firms in an open bidding process.
Yeah. How'd that work out? Antonia Juhasz fills us in on Bechtel's "progress" to date (and the "lost" summer of 2003):

Depending on whom you ask, either Bechtel or the Bush administration decided that, instead of getting Iraq's electricity system up and running as quickly as possible, a countrywide assessment of all systems was necessary before any reconstruction could begin. The assessment took five long months. These happened to be summer months in a country where temperatures regularly top 125 degrees Fahrenheit. No electricity meant no fans, no ice, no cold drinks and no air conditioners, and a lack of clean water and reliable sewage treatment. It's difficult to exaggerate the extent of Iraqi suffering during those five months.
The summer following the March invasion was a particularly crucial period in which Iraqi goodwill all but evaporated.
It certainly made sense to assess the situation before building, but much of this assessment could have been done prior to the invasion as part of the post-invasion planning. After the invasion, short of turning the reconstruction over to the Iraqis, at least the assessment should have been done in direct discussions and partnership with Iraqi engineers who had run the systems for decades.
What the Bechtel employees discovered was that two wars and 12 years of economic sanctions had taken their toll. The systems were far more difficult to repair than they had assumed. Of course, the Iraqis who ran the systems could have easily conveyed this information to Bechtel from the start if the administrator of the U.S. occupation government of Iraq, L. Paul Bremer, had not fired the vast majority of them and if Bechtel had asked.
The critical time lost on the assessment bred increasing hostility toward the invasion among ordinary Iraqis. The lack of water, electricity, and sewage services led to increasing acts of sabotage against all foreign contractors, including Bechtel.

Juhasz goes on to debunk the odious myth that Iraqis are somehow incompetent or unwilling to manage their own infrastructure:

Nobody at Bechtel or in the U.S. government denies that the water and electricity reconstruction has failed. According to SIGIR, while $3 billion has been paid out, only half of the projects planned in the electricity, water and sewage sectors have been completed, while nearly a third in the electricity sector have not yet been begun. Many of the systems that have been built are poorly run or have not been connected to peoples' homes. In fact, one of the biggest problems plaguing the electricity system today is the failure to build transmission and distribution lines. Bechtel and some Bush administration officials lay the blame squarely with the Iraqis.
According to Bechtel, of the more than 40 water plants it has built, which are now being run by the Iraqis, "not one is being operated properly." U.S. officials say the same: "None of the 19 electrical facilities that has undergone U.S.-funded repair work is being run correctly." They blame a poor Iraqi work ethic and a lack of knowledge and skill in running the plants.
Iraqis may be unable to run the systems built by Bechtel in Iraq, but a poor work ethic and lack of knowledge are not to blame.
Paul Bremer fired the upper echelons of Iraqi management, sidestepped skilled engineers and workers, hired Bechtel to build state-of-the-art facilities that are foreign to these workers and then handed the systems over as a fait accompli, whether or not they were even connected to the homes they were intended to serve.
Baghdad's Mayor Alaa Tamimi, an engineer who returned to Iraq after years of exile to help rebuild the country, said that U.S. officials "made a lot of decisions themselves, and the decisions were wrong. This is our country. It's our city. They didn't accept that."
The other problem is money. Iraqis simply do not have enough of it to run the expensive new facilities that they have been handed. The money has gone to U.S. contractors to (largely fail to) build Iraq's systems, rather than to the Iraqis to run the systems after they have been rebuilt.

So what happened to all that money? Did the invisible hand of the free-market get too grabby?
According to USAID, Bechtel has been paid $970 million on its Infrastructure I contract. Bechtel was originally awarded $1.8 billion for its Infrastructure II contract. In November 2004, USAID reduced the amount to $1.4 billion in response to a reallocation of funds, primarily to training Iraqi soldiers. Of the $1.4 billion, $1.26 billion has been obligated and $977 million has been paid to Bechtel.
This means that $511 million from Bechtel's contracts is immediately available to for Iraqi companies. [...] There is also $166 million in unobligated funds from Bechtel's Infrastructure II contract that must be immediately turned over to Iraqi companies before that money reverts to the U.S. Treasury on Sept. 30. Finally, there are likely millions of misspent dollars that Bechtel must return to U.S. taxpayers and Iraqis.
I'll leave you with a quote that haunts me about once per week. It was first brought to my attention by Naomi Klein's "Baghdad Year Zero" piece in Harper's (Sept 2004):
I had traveled to Iraq a year after the war began, at the height of what should have been a construction boom, but after weeks of searching I had not seen a single piece of heavy machinery apart from tanks and humvees. Then I saw it: a construction crane. It was big and yellow and impressive, and when I caught a glimpse of it around a corner in a busy shopping district I thought that I was finally about to witness some of the reconstruction I had heard so much about. But as I got closer I noticed that the crane was not actually rebuilding anything—not one of the bombed-out government buildings that still lay in rubble all over the city, nor one of the many power lines that remained in twisted heaps even as the heat of summer was starting to bear down. No, the crane was hoisting a giant billboard to the top of a three-story building. SUNBULAH: HONEY 100% NATURAL, made in Saudi Arabia.
Seeing the sign, I couldn’t help but think about something Senator John McCain had said back in October. Iraq, he said, is “a huge pot of honey that’s attracting a lot of flies.”
You can also listen to Antonia Juhasz on DemocracyNow radio (discussing her book: "The Bush Agenda: Invading the World, One Economy at a Time").

Post-script: Tony Blair attends party at George Shultz's California penthouse. Bechtel is bidding on construction contracts relating to the London Olympic games.


Blogger Mike said...

Nice digging

8/05/2006 4:53 PM  

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