Iraq transition languishing

WASHINGTON – Iraq’s central government has refused to take possession of more than 2,300 completed reconstruction projects financed with billions of U.S. taxpayer dollars, according to the latest quarterly report by the U.S. agency that oversees the rebuilding effort.

As a result, many projects are being turned over to local entities that cannot adequately support them or are being run with continued U.S. funding, the report by the special inspector general for Iraq reconstruction, Stuart W. Bowen Jr., found.

The report, to be released today, said the U.S. government had overseen completion of 2,797 projects, at a cost of $5.8 billion. The central government has taken over only 435 of them, worth $501 million.

No project has been turned over to the central government since July 2006, two months after Prime Minister Nouri al-Maliki’s government was installed and the Ministry of Finance “changed the … conditions on the asset transfer process,” the report said.

But even the Iraqi government’s acceptance of projects does not mean they will be adequately funded or maintained, said the report, citing problems with the Doura power station, which services Baghdad.

The rebuilt units were transferred to the Ministry of Electricity in the spring of 2006. But in August, workers removed parts from one unit, taking it off-line, to keep the other functioning after it failed because of poor maintenance. That second unit failed again, said the report, which noted that “the ministry has operated ineffectively or has insufficiently maintained equipment” at the power station.

The U.S. Army Corps of Engineers has taken over the repair and hopes to have both units operational in August.

Reconstruction efforts are also hampered by security issues and attacks on contractors; by insufficient capital spending at both the national and the provincial level; and by widespread corruption, which the report described as a “second insurgency.”

The report included the first congressionally mandated “forensic audit” of large contracts funded by the Iraq Relief and Reconstruction Fund, which has received about half of the $44.5 billion in relief and reconstruction funds appropriated by Congress. The initial review examined the work of Bechtel National Inc., the San Francisco engineering company, which won the largest contract, for $1.33 billion, awarded by the U.S. Agency for International Development.

Because of changes in requirements, unanticipated costs and unexpected delays, among other things, about half the projects have failed to meet their stated objectives, the report found. In addition, the U.S. government hindered Bechtel’s work by failing to supply enough personnel to oversee the contract, and projects required large numbers of subcontractors, weakening quality control.