Financial Times; Aug 26, 2003 Iraqis say they are in the dark over rebuilding plans By John Dizard
At the Doura power station, a large oil-fired plant that supplies much of Baghdad's electricity, a single engineer is working with an acetylene torch to repair a much-patched heat exchanger.
The site is strewn with rusted pipes, broken gauges and refuse. Only two of its four turbines are in working order. An aged Fiat gas turbine wheezes along on low-pressure natural gas.
Doura's two broken turbines are supposed to provide 320MW, equivalent to a 10th of Iraq's entire current production. But the Siemens engineers whose company built the plant have made a survey and gone home; their future work schedule is not clear. The US army unit is an Airborne artillery company, not Corps of Engineers specialists.
"You don't see the civilians out here," an army officer grimaces, referring to the Coalition Provisional Authority. "The Iraqis just agree with everything you ask, and then nothing happens."
The fitful effort to restore electricity supplies epitomises the so far ineffectual reconstruction effort in Iraq. Shortages - not just of energy but of goods and services of all kinds - remain acute. The lack of security and the country's dilapidated condition remain the two biggest problems.
But increasingly contractors and CPA dissidents openly allege that the US's direction of Iraq's recovery is beset by bureaucratic inertia and mismanagement.
"The Americans have a lot of problems," says Dattar Kassam, director-general of Baghdad's refinery. "They are overwhelmed and understaffed. Just when I get to know one of them, he gets himself sent back.
"Until the war broke out, I used to be able to order my own high-priority spare parts through Jordan. We are depending now on KBR [Kellogg, Brown and Root, a Halliburton subsidiary] to order our spare parts, but so far we haven't received any."
In telecommunications, it is taking some time to fix the landline telephone service. But in July regional operators were asked to switch off the rough and ready services they had started to provide inside Iraq, as the US invited tenders for a new cellular telephone system.
Yet one member of a bidding consortium describes the tendering process - which initially offered companies only two weeks to submit their bids for a two-year concession - as opaque, unrealistic and technically incompetent.
Similar discontent has been stirred in the Iraqi banking sector by the CPA's decision to seek international operators for a new Trade Bank of Iraq.
Local bankers strongly dispute the assertion by Peter McPherson, the Michigan state university president seconded to be head of the US Treasury's Iraq team, that the Iraqi financial sector is "not in a position to undertake (trade finance) at this time. They do not have much capital, and most of them are undergoing restructuring. What you see are just empty shells."
According to Ayad Al Atia, the head of the Iraqi Bankers' Association and an officer of the Warka Investment bank: "Comments such as that just show the ignorance of the Coalition Provisional Authority."
In practice, private banks such as Warka not only preserved their records during the war and its aftermath but have established ties with Iraqi private companies and long experience in executing trade finance.
As set up under an administrative order dated July 17, however, the TBI's initial capital will come from coalition-administered funds, and its CPA-appointed president authorised to enter a short-term contract with an operating consortium of international banks.
Contractors are also beginning to question the CPA's internal financial operation. They complain that payments for services are made late - and in cash, even when the amounts are in the millions of dollars.
"They don't want to use US government accounts because they don't want the appearance of commingling Iraqi and US funds," says one contractor. "They told me two months ago they would have the system fixed, but I am still getting payments in currency."
In the meantime, the funds allocated to infrastructure rehabilitation barely scratch the surface of accumulated needs.
For example, one US engineer says: "We need between $5bn and $6bn to rebuild the electricity system. Bechtel has been allocated about $200m to do the job. Even that is not being used effectively yet."
Mr Bremer himself has suggested that the total capital requirements for the electricity system might be as much as $15bn.
Mohsen Hassan, the director-general of technical services for the Electricity Commission, says: "Before the war we used about 4,500MW throughout the country. The total demand is about 6,200MW. Right now we are producing about 3,200MW. While there is supposed to be a budget of $200m for repairs for the year, we have only been given $2m for all the materials and labour we will use from July through the middle of September.
"We have to go to Bechtel for all our imported parts but Bechtel is moving in slow motion. We have received no parts yet, just some chemicals."
"What they will tell you privately," says a dissident CPA adviser, "is that they expect the international community to eventually come in and provide the billions necessary for the electrical system.
"Assuming their diplomacy now works, that puts any start to a solution off for months, and the implementation for years. The country can't stand the delay."