Contract reveals challenges to Iraq rebuild

BAGHDAD, Iraq – A reconstruction contract for the building of 142 primary health centers across Iraq has run 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 its failure serves as a warning siren for other U.S. reconstruction efforts coming due this year.

Brig. Gen. William McCoy, the Corps of Engineers commander overseeing reconstruction in Iraq, said he still hoped to complete all 142 clinics as promised and was seeking emergency funds from the U.S. military and foreign donors. “I’m fairly confident,” McCoy said.

Coming with little public warning, the 86 percent shortfall of completions dismayed the World Health Organization’s representative for Iraq. “That’s not good. That’s shocking,” Naeema al-Gasseer said by telephone from Cairo. “We’re not sending the right message here. That’s affecting people’s expectations and people’s trust, I must say.”

At the end of 2006, the $18.4 billion that Washington has allocated for Iraq’s reconstruction runs out. All remaining projects in the U.S. reconstruction program, including electricity, water, sewer, health care and the justice system, are due for completion. As a result, the next nine months are crunch time for the easy-term contracts that were awarded to American contractors early on, before surging violence drove up security costs and idled workers.

Stuart Bowen, the top U.S. auditor for reconstruction, warned in a telephone interview from Washington that shortfalls similar to the one involving Parsons may be coming in other reconstruction efforts. “I’ve been consumed for a year with the fear we would run out of money to finish projects,” said Bowen, the special inspector-general for reconstruction in Iraq.

The reconstruction campaign in Iraq is the largest such American undertaking since World War II. The rebuilding efforts have remained a point of pride for American troops and leaders as they struggle with an insurgency and now Shiite Muslim militias and escalating sectarian conflict.

The Corps of Engineers says the campaign so far has renovated or built 3,000 schools, upgraded 13 hospitals and created hundreds of border forts and police stations. Major projects this summer, the Corps says, should noticeably improve basic services such as electricity, which have fallen below pre-war levels despite the billions of dollars that the United States has expended toward reconstruction here.

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 ramp up Iraq’s police and military.