Why US effort to rebuild Iraq came up short

Although the US has spent almost $21 billion on projects, funds have been diverted to security.

The US-led reconstruction effort in Iraq – comparable to the Marshall Plan after World War II – is drawing to a close, but falling short of its original goals.

Of 14,000 planned projects, more than 500 have not been started. Others are in progress including a new oil pipeline to run through northern Iraq.

Corruption and mismanagement of building projects took their toll, particularly in the early stages. Rebuilding has also been battered by insurgent violence.

Kidnappings and murders of construction workers have been common. Billions of dollars meant for schools and roads have been diverted to pay for security measures.

"We will not accomplish our original goals, that is true. But the reason we're not achieving the original goals is because some of the funds were moved to Iraqi [security] forces, with good reason," says Kathye Johnson, director of reconstruction for the Gulf Region Division of the Army Corps of Engineers.

To date, the US has spent almost $21 billion on Iraqi rebuilding projects.

Money from the main US reconstruction fund must be obligated by September 30, the end of this fiscal year. Iraqis take control of the overall endeavor October 1.

Crucial rebuilding sectors have seen progress in recent weeks, notes a new report from the US Special Inspector General for Iraqi Reconstruction. Production levels for both oil and electricity have surpassed prewar numbers.

"Electricity output nationwide now exceeds 5,000 megawatts, and oil production reached 2.5 million barrels per day," according to the Special Inspector General's tenth quarterly report to Congress.

There are some disparities within these numbers, however. In the electrical sector, for instance, areas outside Baghdad receive 12.1 hours per day of power, more than before 2003. But in Baghdad itself, the comparable figure is 8.1 hours – less than before the war.

In part this is because power is now distributed more equitably throughout Iraq than it was when Saddam Hussein was in power. But "Baghdad's electricity deficit also stems from an inability to transfer power from power plants in northern and southern Iraq to the capital," states the Special Inspector General report.

Other officials note that dissatisfaction with the power grid also stems partly from the fact that many Iraqis now have more electrical devices – such as computers and personal air conditioners – than they did in Saddam's day.

"The demand has increased significantly," says Ms. Johnson.

In the oil sector, production reached prewar levels in June, but declined slightly in the following weeks. Critical initiatives, such as the repair and refurbishment of the Al Basrah Oil Terminal, remain unfinished – though US reconstruction officials estimate that most oil projects will be completed by January 2007.

Overall, the US has completed about 12,000 of the 14,600 projects originally planned, according to the Special Inspector General. About 2,000 projects are still in progress.

September 30 won't mark the end of US involvement in Iraqi reconstruction, to be sure – some money will to continue to flow into projects through normal US foreign aid channels.

But that cash won't flow nearly as freely as funds have to this point. The Iraqi government will have to use its own money, primarily from oil revenues, to complete some projects. It is sure to continue to appeal to international donors for increased aid.

When Iraqi Prime Minister Norui al-Maliki addressed Congress during his Washington visit last week, he made a point of asking for continued assistance.

"We need your help," Maliki said. "Much of the budget you had allocated for Iraq's reconstruction ended up paying for security firms and foreign companies, whose operating costs were vast."

In a separate report released Thursday in conjunction with a Congressional hearing, the Special Inspector General for Iraq concludes that the initial stages of the reconstruction effort were halting and confused, as a few overwhelmed officials tried to piece together a massive program from scratch.

"This lack of coordination in early planning was attributable, in part, to the fact that much of the activity was classified," says this report, a chronological study of reconstruction efforts.

The report suggests that the US create a deployable reserve of reconstruction officials to prevent similar problems in the future.

To critics, the US reconstruction of Iraq has been a series of missteps, "a story of mistakes make, plans poorly conceived or overwhelmed by ongoing violence," in the words of Sen. Susan Collins (R) of Maine.

Reconstruction officials defend their accomplishments, saying they have come a long way after a slow start.

Johnson ticks off accomplishments such as projects that will increase liquefied petroleum gas production to 3,000 tons per day, equal to demand; an increase in potable water of 2.6 million cubic meters per day; and provision of sewage treatment for 20 percent of Iraq's people, despite the fact that prior to the invasion some major Iraqi cities have no sewage treatment at all.

"We will have completed everything that is in our budget to do," says Johnson. "Our budget does not meet all the demands for the infrastructure."

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