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Another Iraqi payday for
Bechtel
By Emad Mekay
WASHINGTON - The United States awarded a US$1.8
billion reconstruction contract to United States
engineering giant Bechtel on Tuesday, despite charges
from watchdog groups that the company is too close to
the US administration and that such deals exclude many
Iraqis.
The United States Agency for
International Development (USAID), said that the
24-month Iraq Infrastructure II contract will fund a
wide range of projects, including repairing power
generating facilities, electrical grids, municipal water
systems and sewage systems. It will also cover repair to
airport facilities and additional dredging, repair and
upgrading of the seaport at Umm Qasr.
Also
included in the deal, the company will refurbish and
build government and public facilities, including
schools, ministry buildings and major irrigation
structures, as well as restore essential transport
links.
In April 2003, San Francisco-based
Bechtel was handed an 18-month infrastructure contract
worth $680 million. This time it will work with two
other US companies, Pasadena-based Parsons and Fairfax
and Virginia-based Horne Engineering Services.
Bechtel national president Tom Hash said in a
statement that his company won the deal in "an open,
competitive process".
In the past, many critics
inside and outside Iraq have criticized USAID for
awarding such lucrative work to Bechtel, which has ties
to prominent Republicans like former secretary of state
George Shultz, who serves on the company's board. In
February, Bechtel chief executive officer Riley Bechtel
was appointed by US President George W Bush to the
President's Export Council, an influential economic
advisory panel.
Groups monitoring the US-led
occupation in Iraq have decried the awarding of the
contracts because they sidestep Iraqi contractors, while
several Iraqis have complained that US officials have
let firms associated with the former regime enrich
themselves via the deals.
Under its previous
contract, Bechtel re-opened the deepwater port of Umm
Qasr, refurbished 1,239 primary and secondary schools
and worked to restore water service to the city of
Safwan's 40,000 residents. The company also says that it
returned desperately needed electricity generation to
pre-conflict levels.
Reconstruction contracts in
Iraq are awarded through three sources: the US Army,
USAID and the Coalition Provisional Authority headed by
US administrator L Paul Bremer.
US officials
have denied accusations of cronyism and exclusion of
Iraqis in the contracting process. The USAID said in a
statement that in all of its activities, contractors
will work with Iraqis to strengthen the local capability
to undertake infrastructure projects.
Hash said
that Bechtel intends to build on its current goal of
hiring the maximum number of Iraqi employees at all
levels, and to provide comprehensive training and work
experience for Iraqi managers and their workers. The
firm is also developing a program to include small
businesses in the project, he added. Bechtel says that
it has awarded 122 sub-contracts to 102 Iraqi firms out
of a total of 162 sub-contracts.
But critics say
that sub-contractors are used only to provide basic,
low-skilled services, and that other bidding
requirements eliminate medium-size and small Iraqi
companies. "In most of the cases, these companies have
to purchase American insurance and therefore they
immediately limit the field to only those Iraqis who
have a very large capital base, which then disadvantages
the middle-class Iraqi businessman and the low-income
Iraqi businessman," said Rania Masri of the Campaign to
Stop the War Profiteers and Corporate Invasion.
The size and span of the sub-contracts also
limits which companies can apply, say critics. "When
USAID and other US agencies offer contracts that are
extremely large in nature, they immediately limit the
number of companies that can apply for these contracts,"
Masri told IPS from South Carolina State.
"The
more stuff they bring together under one contract, the
more they are implicitly limiting the numbers of
companies that can apply for the contract ... instead of
breaking the contract down and awarding, say, a smaller
contract just for schools or awarding a contract for an
electrical facility in Baghdad, for example."
US
watchdog groups have previously criticized the
contracting process. In October, the Center for Public
Integrity, an independent research group, said that some
70 US firms with strong connections to the Bush
administration had won at least $8 billion worth of
reconstruction contracts in Iraq and Afghanistan in the
past two years.
Nearly 60 percent of the 70
companies had employees or board members who either
served in or had close ties to the executive branch in
Republican and Democratic administrations, to members of
Congress or at the highest levels of the military, it
added.
But USAID said this contract, unlike the
previous Bechtel deal, was awarded through competitive
bidding in full compliance with the Federal Acquisition
Regulations, which considers technical capability,
previous experience, past performance and cost.
Washington is also maintaining its ban on
companies from countries that opposed the US invasion of
Iraq - a decision that has angered so-called "friends"
of the US such as France, Germany and Canada.
Bechtel has a history of profiteering after wars
and of disregarding human rights conditions in Iraq.
Last month, newly declassified official documents from
the US State Department showed the company planned in
1988 to continue to build a petrochemical plant for the
Saddam Hussein regime despite a US congressional ban to
stop American companies from working in Iraq because of
Saddam's well-documented use of chemical weapons on
Iraqi Kurds. The project was stopped when Iraq invaded
Kuwait in 1990.
After the 1991 Gulf War, Bechtel
won contracts to rebuild Kuwait's energy infrastructure
and extinguish 650 fires blazing in the oil fields. The
company later won lucrative contracts to clean up and
restore more than 400 miles of Saudi Arabian shoreline.
(Inter Press Service)
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