Iraq Reconstruction to Cost 1.7 Billion?

I heard on NPR that the Iraq reconstruction cost currently is at $18 billion and rising.

 

$1.7 b seems low.

After a football stadium, baseball stadium and an arena...really, there's not much left.

Have these guys ever been wrong on their projections before?

 

Well, they were only off by an order of magnitude. This is actually pretty consistent. This administration is commonly off by a factor of 10. Budget forecasts, jobs predictions, and so on.

 

It looks like a large proportion of the soldiers are starting to agree.
http://www.globalsecurity.org/org/news/2004/040614-army-re-enlistment.htm

Rocky Mountain News June 14, 2004

GIs marching away from re-enlistment
War may have some Fort Carson troops leaving the ranks

In-Depth Coverage
By Dick Foster, Rocky Mountain News

COLORADO SPRINGS - Army re-enlistments have dropped suddenly and dramatically at Fort Carson and several other posts where combat units have recently returned from Iraq.

The surprising decline within the past 21/2 months has jolted recruiters and military analysts and provoked questions about the war's effect on the Army's recruiting ability.

Since Fort Carson units began coming home in April, post recruiters have met only 57 percent of their quota for re-enlisting first-term soldiers for a second hitch, according to an Army report.

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Wouldn't it be great if we had enough money to take care of things at home first?

 

The great part about this lie is that it's actually a sworn testimony lie. Contrary evidence existed at the time this testimony was given, and just plain common sense makes the last sentence demonstrably untrue.

I guess Wolfy can lean back on the Tobacco exec defense "Mr. Senator, I don't personally believe there's a connection between tobacco use and cancer."

 

From Christian Aid...
___________

Fuelling suspicion: the coalition and Iraq's oil billions /28.06.04

The US-controlled coalition in Baghdad is handing over power to an Iraqi government without having properly accounted for what it has done with some $20 billion of Iraq's own money, says a new report published by Christian Aid.

• Download full report (166kb PDF)
• More information on downloading PDFs

An audit, reportedly critical, of the coalition’s handling of Iraqi revenues is not going to be delivered until mid-July – after the coalition has ceased to exist.

Christian Aid believes this situation is in flagrant breach of the UN Security Council resolution that gave control of Iraq’s oil revenues and other Iraqi funds to the Coalition Provisional Authority (CPA).

‘For the entire year that the CPA has been in power in Iraq, it has been impossible to tell with any accuracy what the CPA has been doing with Iraq’s money,’ said Helen Collinson, head of policy at Christian Aid.

Resolution 1483 of May 2003 said that Iraq’s oil revenues should be paid into the Development Fund for Iraq (DFI), that this money should be spent in the interests of the Iraqi people, and be independently audited. But it took until April 2004 to appoint an auditor – leaving only a matter of weeks to go through the books.

Early reports of the audit indicate strong criticisms of the CPA’s handling of Iraq’s money. But the CPA is not going to be around to be held accountable.

In the run-up to the handover, nearly $2 billion of Iraq’s money has been hastily allocated. The new Iraqi government will be committed to these spending decisions.

Iraq’s oil represents huge potential wealth. With half of the population still unemployed, the Iraqi people need to be able to see that the oil revenues are being spent to alleviate poverty and to improve their lives.


• Press release /28.06.04

• Iraq: The Missing Billions
In October 2003 Christian Aid revealed that an astonishing $4 billion of Iraq's oil revenues and other funds were unaccounted for. Iraq: The Missing Billions called for much greater clarity and for a thorough audit - which even at that time was months overdue.



http://www.christian-aid.org.uk/indepth/406iraqoilupdate/index.htm

 

Sweet Jesus....the cost is going to be 18 billion plus? Couldn't we just BUY Iraq outright and save all this "independent and free Iraq" mumbo-jumbo?!

 

about 3 million people are homeless in this country, with 38% of those being children, and we're spending Billions and billions to help Iraqis, something is wrong with this picture

 

From The Nation...
____________

lookout by Naomi Klein

Shameless in Iraq
[from the July 12, 2004 issue]

Good news out of Baghdad: the Program Management Office, which oversees the $18.4 billion in US reconstruction funds, has finally set a goal it can meet. Sure, electricity is below prewar levels, streets are rivers of sewage and more Iraqis have been fired than hired. But now the PMO has contracted with British mercenary firm Aegis to protect its employees from "assassination, kidnapping, injury and"--get this--"embarrassment." I don't know if Aegis will succeed in protecting PMO employees from violent attack, but embarrassment? I'd say mission already accomplished. The people in charge of rebuilding Iraq can't be embarrassed, because clearly they have no shame.

In the run-up to the June 30 underhand (sorry, I can't bring myself to call it a "handover"), US occupation powers have been unabashed in their efforts to steal money that is supposed to aid a war-ravaged people. The State Department has taken $184 million earmarked for drinking water projects and moved it to the budget for the lavish new US Embassy in Saddam's former palace. Short $1 billion for the embassy, Deputy Secretary of State Richard Armitage said he might have to "rob from Peter in my fiefdom to pay Paul." In fact, he is robbing Iraq's people, who, according to a recent study by Public Citizen, are facing "massive outbreaks of cholera, diarrhea, nausea and kidney stones" from drinking contaminated water.

If occupation chief Paul Bremer and his staff were capable of embarrassment, they might be a little sheepish about having spent only $3.2 billion of the $18.4 billion Congress allotted--the reason the reconstruction is so disastrously behind schedule. At first, Bremer said the money would be spent by the time Iraq was sovereign, but apparently someone had a better idea: Parcel it out over five years so Ambassador John Negroponte can use it as leverage. With $15 billion outstanding, how likely will Iraq's politicians be to refuse US demands for military bases and economic "reforms"?

Unwilling to let go of their own money, the shameless ones have had no qualms about dipping into funds belonging to Iraqis. After losing the fight to keep control of Iraq's oil money after the underhand, occupation authorities grabbed $2.5 billion of those revenues and are now spending the money on projects that are supposedly already covered by US tax dollars.

But then, if financial scandals made you blush, the entire reconstruction of Iraq would be pretty mortifying. From the start, its architects rejected the idea that it should be a New Deal-style public works project for Iraqis to reclaim their country. Instead, it was treated as an ideological experiment in privatization. The dream was for multinational firms, mostly from the United States, to swoop in and dazzle the Iraqis with their speed and efficiency.

Iraqis saw something else: desperately needed jobs going to Americans, Europeans and South Asians; roads crowded with trucks shipping in supplies produced in foreign plants, while Iraqi factories were not even supplied with emergency generators. As a result, the reconstruction was seen not as a recovery from war but as an extension of the occupation, a foreign invasion of a different sort. And so, as the resistance grew, the reconstruction itself became a prime target.

The contractors have responded by behaving even more like an invading army, building elaborate fortresses in the Green Zone and surrounding themselves with mercenaries. And being hated is expensive. According to the latest estimates, security costs are eating up 25 percent of reconstruction contracts--money not being spent on hospitals, water-treatment plants or telephone exchanges.

Meanwhile, insurance brokers selling sudden-death policies to contractors in Iraq have doubled their premiums, with insurance costs reaching 30 percent of payroll. That means many companies are spending half their budgets arming and insuring themselves against the people they are supposedly in Iraq to help. And according to an estimate by Charles Adwan of Transparency International, quoted on NPR's Marketplace, "At least 20 percent of US spending in Iraq is lost to corruption." How much is actually left over for reconstruction? Don't do the math.

Rather than models of speed and efficiency, the contractors look more like overbilling, underperforming, lumbering beasts, barely able to move for fear of the hatred they have helped generate. The problem goes well beyond the latest reports of Halliburton drivers abandoning $85,000 trucks on the road because they don't carry spare tires. Private contractors are also accused of playing leadership roles in the torture of prisoners at Abu Ghraib. A landmark class-action lawsuit filed by the Center for Constitutional Rights alleges that the Titan Corporation and CACI International conspired with US officials to "humiliate, torture and abuse persons" to increase demand for their "interrogation services."

And then there's Aegis, the company being paid $293 million to save the PMO from embarrassment. It turns out that Aegis's CEO, Tim Spicer, has a bit of an embarrassing past himself. In the 1990s, he helped put down rebels and stage a military coup in Papua New Guinea and hatched a plan to break an arms embargo in Sierra Leone.

If Iraq's occupiers were capable of feeling shame, they might have responded by imposing tough new regulations. Instead, Senate Republicans just defeated an attempt to bar private contractors from interrogating prisoners and also voted down a proposal to impose stiffer penalties on contractors who overbill. Meanwhile, the White House is also trying to get immunity from prosecution for US contractors in Iraq and has requested the exemption from the new Prime Minister, Iyad Allawi.

It seems likely that Allawi will agree, since he is, after all, a kind of US contractor himself: A former CIA spy, he is already threatening to declare martial law, while his Defense Minister says of resistance fighters, "We will cut off their hands, and we will behead them." In a final feat of outsourcing, Iraqi governance has been subcontracted to even more brutal surrogates. Is this embarrassing, after an invasion to overthrow a dictatorship? Not at all--this is what the occupiers call "sovereignty." The Aegis guys can relax: Embarrassment is not going to be an issue.

http://www.thenation.com/docprint.mhtml?i=20040712&s=klein

 

to follow up from rim's posts...

U.S. Spent Iraq Money Faster Than Own

WASHINGTON - The United States spent far more of Iraq's money than its own in the first year of reconstruction, according to a new congressional report.

As of April, about $58 billion in grants, loans, Iraqi assets and revenues has been made available or pledged to reconstruction and relief efforts in post-Saddam Iraq, the General Accounting Office said in a report made public Tuesday.

That includes $24 billion in U.S. funds, $13.6 billion in international pledges and $21 billion largely from sales of Iraqi oil and assets of the former regime that had been frozen or seized by various nations.

Of the $24 billion in American funds, the occupation authority signed contracts and obligated $8.2 billion and actually handed out $3 billion, the GAO report said.

Of the $21 billion in Iraqi money, authorities made commitments for $13 billion and actually spent $8.3 billion, the GAO said. It said complete and reliable information on disbursements of funds from international pledges was not available when it did the report this spring.

The report was sent to chairmen of the Senate and House foreign relations panels Monday.

http://story.news.yahoo.com/news?tm...8&u=/ap/20040629/ap_on_go_co/us_iraq_spending

 

June 30, 2004
BRICKS, MORTAR AND MONEY
Reality Intrudes on Promises in Rebuilding of Iraq
By JAMES GLANZ and ERIK ECKHOLM

BAGHDAD, Iraq, June 29 — The four big smokestacks at the Doura power plant in Baghdad have always served as subversive truth-tellers. No matter what Saddam Hussein's propagandists said about electricity supplies, people knew they could get a better idea of the coming day's power by counting how many stacks at Doura were spewing smoke.

Mr. Hussein is vanquished and a new Iraqi government has just gained formal sovereignty, but those smokestacks remain potent markers — not only of sporadic electricity service but of the agonizingly slow pace of Iraq's promised economic renewal.

More than a year into an aid effort that American officials likened to the Marshall Plan, occupation authorities acknowledge that fewer than 140 of 2,300 promised construction projects are under way. Only three months after L. Paul Bremer III, the American administrator who departed Monday, pledged that 50,000 Iraqis would find jobs at construction sites before the formal transfer of sovereignty, fewer than 20,000 local workers are employed.

Inside the high-profile Doura plant, American-financed repairs, originally scheduled to be completed by June 1, have dragged into the summer even as the demand for electricity soars and residents suffer through nightly power failures.

At the same time, an economy that is supposed to become a beacon of free enterprise remains warped by central controls and huge subsidies for energy and food, leaving politically explosive policy choices for the fledgling Iraqi government.

While the interim government has formally taken office, the reconstruction effort — involving everything from building electric and sewage plants to training police officers and judges — is only beginning.

Scrambling to speed up the process, the Pentagon has recently begun pumping out long-awaited money and work orders, committing $1.4 billion in just the last week even as a spreading insurgency cripples the ability of Western contractors to oversee their projects and has made targets of Iraqi workers.

American authorities, while admitting to a slow start and more aware than anyone of the security threat, insist that the rebuilding will proceed. "Some of the power plants may get blown up," David J. Nash, the retired rear admiral who directs the American building program, said in an interview last week. "But we're not going to stop."

Of the $9 billion in contracts the Pentagon has issued so far, only $5.2 billion has actually been nailed down for defined tasks. Most of those projects are still in planning stages, though officials insist that the rebuilding effort will soon flower.

From the outset the designing of projects and awarding of billions of dollars in contracts proved slower than some officials had imagined.

Among other things, planning, oversight and competitive procedures were tightened after some of the earliest postwar contracts, awarded without competition to companies including Halliburton, were tainted by evidence of waste and overcharging.

But even more, the glowing economic promises met the realities of Iraq. Decades of neglect, sanctions and war left the country's physical infrastructure in far worse condition than many expected. And as an anti-American uprising gained force, the reconstruction effort became a prime target, with oil pipes and power lines blown up as soon as they were repaired and Iraqi workers put in fear of retribution.

From the start, refurbishing Iraq's dismal infrastructure and creating a thriving market economy were promoted by Bush administration officials as pillars of the American-led invasion — "the perfect complement to Iraq's political transformation," in the words of Mr. Bremer.

But more than a year later, supplies of electricity and water are no better for most Iraqis, and in some cases are worse, than they were before the invasion in the spring of 2003.

Repairs of three giant wastewater treatment plants in Baghdad, for example, are weeks or months behind, while water supply systems in the south of the country are months or even years away from functioning properly. Unrepaired bridges continue to create monstrous bottlenecks in many parts of the country.

For Iraqis, the delays have bred frustration and anger. Recent interviews in the upscale Baghdad neighborhood of Harethiya suggest that the electricity woes have, among other things, created a nation of insomniacs, sweltering in their apartments through oppressive nights.

"We are so tired because of the electricity," said Abdul Razzaq, owner of a sundries shop, who said that to top it off, business was down so much that it was hard to pay for private generators.

Just down the street, Samir Ibraheem said security problems forced him to close his shop, which has good air-conditioning, early each night. "The problem is at my house, when I sleep at night," he said.

In less prosperous areas, sorry infrastructure is even more dispiriting. On Sunday a local paper reported that new sewage flooding in five poorer neighborhoods of eastern and western Baghdad was raising serious fears of disease.

Mais Khalid, 20, a student at Baghdad University who lives with her family in Al Elfain, a neighborhood in the southwestern part of the city, said a river of sewage entered her home whenever the door was opened. She traces the problem to a lack of electricity to run the pumps that keep sewer lines clear.

In perhaps the greatest technical success, oil exports have been restored to their prewar levels, bringing in money that will pay the national budget. But attacks shut down pipelines in the last two weeks, and exports are only partly restored.

One clear improvement is in telephone service, but an annoying patchwork system does not allow mobile phones from one part of the country to communicate easily with those in other parts.

The rebuilding effort is supposed to receive a total of some $24 billion in American grants and eventually some $13 billion in international loans. The United States military has already dispensed several additional billions, from oil revenue and seized Iraqi assets, for emergency repairs and small community projects such as renovating schools.

The bulk of the aid was provided in a special Congressional appropriation last fall of $18.4 billion in grant money. Three months ago, mindful of rising Iraqi frustration over the slow pace of change, Mr. Bremer made lavish promises that have only partly been met.

"Now the contracts are signed, and in the coming weeks the dirt will begin to fly on construction jobs all over Iraq," he announced on March 29. By the end of June, he said, "50,000 Iraqis will be working on jobs funded by the partnership for prosperity. But this is just the beginning."

But by this week, only about half of the $18.4 billion had been allocated to contractors, and little of the work was visible.

Construction has been debilitated by bombings and shootings of Western contractors and Iraqi workers, shortages of materials and poor planning. Many contractors have recently had to devote 20 percent or more of their money to armed security instead of building materials and to curb their oversight of subcontractors in the field, even evacuating workers for long stretches.

Because of safety fears, the last Western engineers fled the Doura plant a week ago, leaving disassembled machines on the enormous plant floor. The engineers were from the Siemens Company of Germany, working on a subcontract with American financing.

"They didn't contact me," said Bashir Khalif Omir, the plant's director. "They took their luggage at midnight and they left."

But the transfer of sovereignty has given Mr. Omir new hopes. Because Iraqis now ultimately call the shots on the work, Mr. Omir said, insurgents will no longer have so much reason to attack building projects and their workers.

Whether the rebels will make this distinction remains to be seen. In the meantime, the transfer opens new uncertainties. Will the new Iraqi government alter spending priorities, and how much power will it exert over American money? Will corruption rise as Iraqi ministries assert more influence on the subcontracting of American billions?

Will American decision-making be crippled by bureaucratic rivalries as the State Department takes over many functions from the Pentagon?

The construction office that Admiral Nash heads, until now a strictly Pentagon operation, has been split into two entities, a strategy office reporting to State and an implementing one reporting to the Defense Department. Admiral Nash has been appointed head of both.

"We're still a little unclear about who we will have to interface with on a daily basis," said James Cartner, vice president for Iraq operations for Fluor, a major contractor.

On the broader question of reshaping Iraq's economy, the occupation made limited progress but left some of the most politically tough decisions to the Iraqis.

The new government will inherit a new currency, a renewed banking system and, in measures that were pushed hard by a conservative Republican administration, low taxes and tariffs and a law permitting unhindered foreign investment in non-oil sectors of the economy.

But American officials, fearful of fanning more unrest, put off what economists say are crucial steps toward a functioning market economy and an end to rampant smuggling. They have not carried out plans to phase out Iraq's huge subsidies for fuel and electricity and to end the dependency of a majority of Iraqis on handouts of imported food.

"It's hard to make the economy start working with such irrational prices," said Keith Crane, an economist at the RAND Corporation who advised the Coalition Provisional Authority last year. "And in the long run it doesn't make sense to build refineries so they can sell gas for three cents a liter."

The insurgency has been an obvious source of construction delays. But critics, including some Americans who spent frustrating months in Baghdad, also say the Pentagon's approach to economic restoration was flawed from the outset — seen too much as a bricks and mortar task and in isolation from the country's political and social wounds.

In the initial months of the American occupation, the hard-earned lessons of earlier nation-building campaigns by the United States and the United Nations in places like Bosnia, Afghanistan and East Timor were ignored by Pentagon planners, who tried to rush ahead with showcase infrastructure projects before securing public safety and a sense of participation, critics say.

"We mostly did what we know how to do, instead of what needed to be done," said James Dobbins, a retired diplomat who led American recovery efforts in Afghanistan, Kosovo, Bosnia and elsewhere and said it was a mistake to put the Pentagon in charge of Iraq's economy. "That's what the Army Corps of Engineers does: it hires multinational corporations to build infrastructure."

Critics like Mr. Dobbins, who has not worked in Iraq but was President Bush's envoy to Afghanistan after the American invasion there, say many of the problems should have been foreseen.

"What the Iraqis needed was security, and with that they could get their electricity back on themselves," said Mr. Dobbins, who is now with the Rand Corporation and is chief author of a 2003 study, "America's Role in Nation-Building From Germany to Iraq."

http://www.nytimes.com/2004/06/30/international/middleeast/30RECO.html?hp=&pagewanted=print&position=

 

Totally agree with both statements. "Got money for wars but can't feed the poor."

 

Iraq is worse off than before the war began, GAO reports

By Seth Borenstein
Knight Ridder Newspapers


WASHINGTON - In a few key areas - electricity, the judicial system and overall security - the Iraq that America handed back to its residents Monday is worse off than before the war began last year, according to calculations in a new General Accounting Office report released Tuesday.


The 105-page report by Congress' investigative arm offers a bleak assessment of Iraq after 14 months of U.S. military occupation. Among its findings:


-In 13 of Iraq's 18 provinces, electricity was available fewer hours per day on average last month than before the war. Nearly 20 million of Iraq's 26 million people live in those provinces.


-Only $13.7 billion of the $58 billion pledged and allocated worldwide to rebuild Iraq has been spent, with another $10 billion about to be spent. The biggest chunk of that money has been used to run Iraq's ministry operations.


-The country's court system is more clogged than before the war, and judges are frequent targets of assassination attempts.


-The new Iraqi civil defense, police and overall security units are suffering from mass desertions, are poorly trained and ill-equipped.


-The number of what the now-disbanded Coalition Provisional Authority called significant insurgent attacks skyrocketed from 411 in February to 1,169 in May.


The report was released on the same day that the CPA's inspector general issued three reports that highlighted serious management difficulties at the CPA. The reports found that the CPA wasted millions of dollars at a Hilton resort hotel in Kuwait because it didn't have guidelines for who could stay there, lost track of how many employees it had in Iraq and didn't track reconstruction projects funded by international donors to ensure they didn't duplicate U.S. projects.


Both the GAO report and the CPA report said that the CPA was seriously understaffed for the gargantuan task of rebuilding Iraq. The GAO report suggested the agency needed three times more employees than what it had. The CPA report said the agency believed it had 1,196 employees, when it was authorized to have 2,117. But the inspector general said CPA's records were so disorganized that it couldn't verify its actual number of employees.


GAO Comptroller General David Walker blamed insurgent attacks for many of the problems in Iraq. "The unstable security environment has served to slow down our rebuilding and reconstruction efforts and it's going to be of critical importance to provide more stable security," Walker told Knight Ridder Newspapers in a telephone interview Tuesday.


"There are a number of significant questions that need to be asked and answered dealing with the transition (to self-sovereignty)," Walker said. "A lot has been accomplished and a lot remains to be done."


The GAO report is the first government assessment of conditions in Iraq at the end of the U.S. occupation. It outlined what it called "key challenges that will affect the political transition" in 10 specific areas.


The GAO gave a draft of the report to several different government agencies, but only the CPA offered a major comment: It said the report "was not sufficiently critical of the judicial reconstruction effort."


"The picture it paints of the facts on the ground is one that neither the CPA nor the Bush administration should be all that proud of," said Peter W. Singer, a national security scholar at the centrist Brookings Institution. "It finds a lot of problems and raises a lot of questions."


One of the biggest problems, Singer said, is that while money has been pledged and allocated, not much has been spent. The GAO report shows that very little of the promised international funds - most of which are in loans - has been spent or can't be tracked. The CPA's inspector general found the same thing.


"When we ask why are things not going the way we hoped for," Singer said, "the answer in part of this is that we haven't actually spent what we have in pocket."




He said the figures on electricity "make me want to cry."


Steven Susens, a spokesman for the Program Management Office, which oversees contractors rebuilding Iraq, conceded that many areas of Iraq have fewer hours of electricity now than they did before the war. But he said the report, based on data that's now more than a month old, understates current electrical production. He said some areas may have reduced electricity availability because antiquated distribution systems had been taken out of service so they could be rebuilt.


"It's a slow pace, but it's certainly growing as far as we're concerned," Susens said.


Danielle Pletka, the vice president of foreign and defense policy studies at the conservative American Enterprise Institute, said other issues are more important than the provision of services such as electricity. She noted that Iraqis no longer live in fear of Saddam Hussein.


"It's far better to live in the dark than it is to run the risk that your mother, father, brother, sister, husband or wife would be taken away never to be seen again," Pletka said.


Pletka pointed to a Pentagon slide presentation that detailed increases and improvement in telephone subscribers, water service, food, health care and schools in Iraq.


But Sen. Joseph Biden, D-Del., the ranking Democrat on the Senate Foreign Relations Committee that asked for the GAO report, said the report showed major problems.


"So while we've handed over political sovereignty, we haven't handed over practical capacity - that is, the ability for the Iraqis themselves to provide security, defend their borders, defeat the insurgency, deliver basic services, run a government and set the foundation for economic progress," Biden said in a written statement. "Until Iraqis can do all of that, it will be impossible for us to responsibly disengage from Iraq."


---


The GAO report can be found at


http://www.gao.gov/new.items/d04902r.pdf


http://www.realcities.com/mld/krwashington/9041465.htm?template=contentModules/printstory.jsp

 

Iraq is worse off than before the war began, GAO reports

Quick someone needs to send this report to Condi Rice so that she can read it to GWB.