Monday, April 03, 2006

Reconstruction in Iraq is going... not so good

The next time The Emperor the President of the US complains that none of the news coming out of Iraq is Good News™ it might be worth pointing at this from the Washington Post.

A reconstruction contract for the building of 142 primary health centers across Iraq is running out of money, after two years and roughly $200 million, with no more than 20 clinics now expected to be completed, the U.S. Army Corps of Engineers says.

The contract, awarded to U.S. construction giant Parsons Inc. in the flush, early days of reconstruction in Iraq, was expected to lay the foundation of a modern health care system for the country, putting quality medical care within reach of all Iraqis.

Parsons, according to the Corps, will walk away from more than 120 clinics that on average are two-thirds finished. Auditors say the project serves as a warning for other U.S. reconstruction efforts due to be completed this year.


Stuart Bowen, the top U.S. auditor for reconstruction, warned in a telephone interview from Washington that other reconstruction efforts may fall short like that of Parsons. "I've been consumed for a year with the fear we would run out of money to finish projects," said Bowen, the inspector general for reconstruction in Iraq.


Violence for which the United States failed to plan has consumed up to half the $18.4 billion through higher costs to guard project sites and workers and through direct shifts of billions of dollars to build Iraq's police and military.

In January, Bowen's office calculated the American reconstruction effort would be able to finish only 300 of 425 promised electricity projects and 49 of 136 water and sanitation projects.


Doctors in Baghdad's hospitals still cite dirty water as one of the major killers of infants. The city's hospitals place medically troubled newborns two to an incubator, when incubators work at all.

In April 2004, the project was awarded to Parsons Inc. of Pasadena, Calif., a leading construction firm in domestic and international markets. McCoy, the Corps of Engineers commander, said Parsons has been awarded about $1 billion in reconstruction projects in Iraq.

Like much U.S. government work in 2003 and 2004, the contract was awarded on terms known as "cost-plus," Parsons said, meaning that the company could bill the government for its actual cost, rather than a cost agreed to at the start, and add a profit margin. The deal was also classified as "design-build," in which the contractor oversees the project from design to completion.


Starting in 2004, the need for security sent costs soaring. Insurgent attacks forced companies to organize mini-militias to guard employees and sites; work often was idled when sites were judged to be too dangerous. Western contractors often were reduced to monitoring work sites by photographs, Parsons officials said.

Faced with a growing insurgency, U.S. authorities in 2004 took funding away from many projects to put it into building up Iraqi security forces.


In 2005, plans were scaled back to build 142 primary clinics by December of that year, an extended deadline. By December, however, only four had been completed, reconstruction officials said. Two more were finished weeks later. With the money almost all gone, the Corps of Engineers and Parsons reached what both sides described as a negotiated settlement under which Parsons would try to finish 14 more clinics by early April and then leave the project.


"I can't say this isn't going to happen again, because we really haven't gotten a grasp" of the cost of finishing the many pending projects, Bowen said.
Let me take my socks off so I can work this out. Contract is for 300 absolutely vital clinics. That gets scaled back to 142. OK, next foot and left hand. Four plus two and try to finish fourteen. That's six and maybe 14 more... if Parsons can actually finish them.

Power plants - 425 needed, 300 to be delivered.
Water and sanitation - 136 needed, 49 to be delivered.

And every contractor is in a cost-plus contract. If they don't deliver, they go home... rich. But, hey, they're winning awards!

I can hardly wait to see the pictures of those 20 new clinics being passed out as the Good News™ during one of Bush's next public thingies.

Update: Mark at Section 15 pointed out that Bush has already held out this debacle as a "success".

We're improving roads and schools and health clinics. We're working to improve basic services like sanitation, electricity, and water. And together with our allies, we'll help the new Iraqi government deliver a better life for its citizens.

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