Rebuilding Iraq to Cost Billions
By Charlie Keenan

One of the most critical projects in rebuilding is to upgrade the seaport at Umm Qasar, where this Bechtel employee is working. (Photo: Peter Tobia/NewsCom)

Companies are lining up for lucrative contracts to repair oil refineries, install new telephone lines, make repairs to the water system, and remove land mines. Hospitals must be rebuilt and roads repaved. Offices that were looted need furniture and computers. The list goes on, and the cost will be huge.

Experts estimate the bill for rebuilding Iraq's electrical system alone could run as high as $13 billion. It will cost another $24 billion to provide clean water. All told, experts say the cost to rebuild Iraq will range from $500 billion to $1.6 trillion in the next few years.

To get the job done, the U.S. Agency for International Development (USAid) has tapped American firms to oversee the work. Those firms in turn are hiring companies from around the world to help rebuild the war-torn country.

While Iraq is by no means stable yet, contractors are already at work. The Al Mat Bridge—a key four-lane overpass on Iraq's Highway 10—is again open to traffic. That critical route now carries more than 3,000 trucks daily between Baghdad and Jordan. Iraq's main port at Umm Qasr has also reopened for commercial shipping. In all, officials say several thousand projects, such as rebuilding schools and hospitals, have been completed. But much more still needs to be done.

"Since I announced the end of major combat operations in Iraq, we have made progress—steady progress—in restoring hope in a nation beaten down by decades of tyranny," said U.S. President George W. Bush.

Big contracts are part of the progress. USAid awarded Bechtel Group Inc. a $680 million deal in April. The contract is for rebuilding the water, sewer, and power systems damaged from three wars and economic sanctions over the past two decades. Bechtel is farming out 90 percent of the work to other firms, it says.

Other wings of the U.S. government are awarding contracts too. U.S. Army Corps of Engineers has said it will award two contracts by October to work on Iraq's oil fields. Those contracts will be worth up to $500 million each to restore oil production.

Critics have charged the Bush administration of cronyism, or hiring political friends without regard to cost or qualifications. Indeed, Bechtel, which built the Hoover Dam in the 1930s, has close ties to Washington. And the U.S. Army Corps of Engineers recently nixed a contract to Halliburton Co. due to public criticism. Vice President Dick Cheney used to run the company.

"I want to be sure that the contracts are being given without any kind of favoritism and that we're getting the best deal for the taxpayers," Rep. Henry A. Waxman, a California Congressman who is the lead Democratic member of the House Committee on Government Reform.

Best deal or not, rebuilding Iraq will be expensive. Foreign governments are expected to pick up some of the tab, but it is unclear how much.

"We're talking about, obviously, a lot of money—even in Washington," says Ambassador L. Paul Bremer III, head of the Coalition Provisional Authority, the agency overseeing the U.S.-led occupation of Iraq. The cost is "obviously going to be very high."