Scope of Iraq reconstruction scaling down, official says

The U.S. government is shifting gears in the multibillion-dollar reconstruction effort in war-torn Iraq, siphoning money away from large-scale projects that could take years to complete to smaller, more manageable projects that can show results in shorter time.

The shift away from large infrastructure projects, such as building electric plants, to smaller work, such as repairing existing facilities, is prompted in part by dangerous working conditions in Iraq, and indicates the difficulty U.S. officials have had in managing projects of enormous scale, said Robin Raphel, the State Department's coordinator for Iraq reconstruction.

But while the smaller projects may yield a more visible demonstration of progress--which U.S. officials hope will engender public good will--the shifting of money reflects a significant rethinking of how Iraq will be rebuilt and repaired.

"I think less will be done by the big design-and-build contractors than initially thought," Raphel said in an interview, referring to the kinds of companies that won the first round of contracts to build key facilities, such as power and water treatment plants, sewers, roads and oil production facilities. Among those firms were engineering giants Bechtel Corp. and Halliburton Co.

The rebuilding of key infrastructure, as originally conceived, also was intended to win broad public support among Iraqis for the U.S. invasion, by leaving the country in better condition than it was under Saddam Hussein.

But persistent attacks by insurgents and Islamist terrorist groups, some of which have demolished reconstruction projects as quickly as they were completed, have stymied the rebuilding, which is entering its second year. Also, attacks against contractor employees, which have included kidnappings and videotaped executions, have sidelined workers.

To date, the U.S. government has spent $2.5 billion on reconstruction out of a pool of $18.4 billion Congress appropriated in October 2003, Raphel said. Another $10.4 billion has been obligated but hasn't been disbursed. That money initially was intended to fund large-scale work.

But Raphel said the sheer size of the reconstruction fund stretched the limits of agencies responsible for the rebuilding, such as the U.S. Agency for International Development. "The simple fact is that $18.4 billion is a huge amount of money to program," she said. "It's just almost overwhelming."

Raphel said that in most countries where AID works, $100 million is considered a large budget for a project. She said that other initiatives, such as AID's procurement role in President Bush's $15 billion emergency AIDS relief plan for African countries and its recent efforts in tsunami-stricken nations, has also strained the agency.

Last week, the director of the U.S. organization created to oversee major reconstruction from Baghdad said that those duties would be handed over to the U.S. Army Corps of Engineers in the next few months. Charles Hess told The New York Times that the transition to the Corps had been planned for some time.

One former U.S. official who worked on reconstruction issues in Baghdad said the change in approach could dramatically change Iraq's future. It "means we've put on the back burner any plans to rebuild the infrastructure that Saddam neglected," said Charles Krohn, who was the Army's top public affairs official in Baghdad and represented reconstruction officials. "This was our intent when we thought we would be in Iraq for only a short time, in partial compensation for having destroyed some of the country's infrastructure in our haste to unseat Saddam," Krohn said. "Instead, we're now going after projects that can be completed in the short term. I suspect this is to compete with the terrorists for the hearts and minds of the uncommitted, since we've done so little in comparison to explain our presence."

Raphel said she believes that security will improve in Iraq and that other nations and the World Bank will contribute more funds to the rebuilding. When that happens, she said, she suspects that large international firms will compete for the kind of huge design and construction contracts that heretofore have been limited to companies from the United States and nations that supported the war. U.S. firms "have no corner" on that work, she said, if the funds to complete them are coming from other sources.