The Hindu : Bechtel bags Iraq reconstruction contract

Online edition of India's National Newspaper
Saturday, Apr 19, 2003

International

International

Bechtel bags Iraq reconstruction contract

NEW YORK APRIL 18 . A contract worth up to $680 million has been awarded to the U.S.-based Bechtel Group to facilitate reconstruction of war-ravaged Iraq even as the decision has angered American allies in Europe who are of the view that the move cuts off the UN.

The initial award was worth $34.6 million, but it also provided for funding of up to $680 million over 18 months, subject to Congressional approval, the U.S. Agency for International Development (USAID) said yesterday.

Bechtel, based in San Francisco, was given the job of emergency infrastructure repair and rehabilitation.

``Restoration of the country's key infrastructure is a priority of the U.S. Government's effort to strengthen Iraq's economy and ensure delivery of essential public services to the Iraqi population,'' USAID said in a statement. The contract called for the repair, rehabilitation or reconstruction of vital elements of Iraq's infrastructure.

Media reports said that the U.S. plans to cut down role the world body is playing in managing the `oil for food' programme and making World Bank as the neutral accountant for oil revenues which might leave the world body dealing with only humanitarian issues.

British companies are already upset at being cut out of the most lucrative deals to build post-war Iraq, a report in the New York Times said.

Also angry are several American companies with political connections who feel left out but analysts say that the contracts granted to Bechtel are only fraction of what would cost to rebuild country's power, rail, road and water supply infrastructure also airports.

Experts at the UN estimate that the reconstruction could cost $25 billion to 30 billion but others put the figure at around $100 billion.

The American taxpayers would pay the initial cost of reconstruction that would be recovered from the Iraqi oil revenues. Administration officials say it was important to give contracts to American corporations, essentially leapfrogging over international groups, as a way to demonstrate to the Iraqi people that the U.S is a liberator bringing economic prosperity and democratic institutions to their nation.

"We don't see the need for a UN operation at all, the Iraqi interim authority will be the equivalent of a civilian UN administration,'' said the senior administration official told The Times.

As the administration sketches out its post-war Iraqi plans, officials say that the World Bank eventually can act as the neutral international body that will be the accountant for oil revenues, replacing the United Nations, which has overseen the oil-for-food programme till now. This would require the creation of an Iraqi authority that is accepted by other nations and international organisations, including the UN. — PTI

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