- "San Francisco-based Bechtel was originally awarded
an 18 month, $680 million contract for Iraqi reconstruction work... Andrew
Natsios, the head of the U.S. Agency for International Development, promised
that no additional taxpayer money would go into the Bechtel contract beyond
the $680 million ceiling."
-
- "According to a funding document from the U.S.-led
Iraqi provisional authority, however, U.S. officials recently decided that
Bechtel requires the additional $350 million "to maintain momentum
in high-priority infrastructure projects.""
-
- Faced with escalating costs and continued instability
in Iraq, U.S. officials in Baghdad have decided to boost Bechtel Group
Inc.'s postwar reconstruction contract by $350 million, or more than 50%,
The Wall Street Journal reported Thursday.
-
- The decision to steer additional funds to Bechtel is
the latest sign that the Bush administration has seriously underestimated
the cost and complexity of rebuilding Iraq. Although the U.S. plans a dramatic
push for new reconstruction funds -- part of what one U.S. official said
will be a $2.75 billion emergency budget request for Iraq next month --
the administration remains vague on what the overall project is likely
to cost.
-
- The new Bechtel money, which could be turned over within
days, is part of at least $1 billion the U.S. hopes to pour into Iraqi
power generation alone over the next year. U.S. officials and Bechtel assessment
teams now estimate Iraqi reconstruction will cost at least $16 billion
and likely much more. L. Paul Bremer, the top U.S. official in Iraq, has
said that the costs of rebuilding Iraq and revitalizing its economy could
top $100 billion.
-
- San Francisco-based Bechtel was originally awarded an
18 month, $680 million contract for Iraqi reconstruction work on airports,
water, power, schools, roads and government buildings. After business rivals
and some legislators criticized the limited competition involved in that
award, Andrew Natsios, the head of the U.S. Agency for International Development,
promised that no additional taxpayer money would go into the Bechtel contract
beyond the $680 million ceiling.
-
- According to a funding document from the U.S.-led Iraqi
provisional authority, however, U.S. officials recently decided that Bechtel
requires the additional $ 350 million "to maintain momentum in high-priority
infrastructure projects." Mr. Bremer approved the new projects on
Aug. 20, according to the document.
-
- Yesterday, an AID spokeswoman said that "security
conditions" had evidently led Mr. Bremer to lift the limit and give
more work to Bechtel. The additional $ 350 million will come from what's
left of a $2.5 billion Iraq reconstruction fund Congress approved early
this year.
-
- U.S. officials also said they are willing to consider
sharing responsibility for security with a United Nations-backed multinational
force as long as it was under American command.
-
- Possibly within weeks, the Bush administration plans
to put out for bids a new contract for follow-on work in Iraq that could
be valued at well over $2 billion, according to administration and congressional
sources. The contract would focus mainly on power and water work.
-
- Congress has pressured the administration to open any
additional Iraq work to competition and not simply to stick with the same
contractors.
-
- Michael Kidder, a Bechtel spokesman, said there have
been "informal discussions" in Baghdad on the need for new funding
but added that "we have not received any formal notification of additional
work in Iraq."
-
- Wall Street Journal staff reporters Neil King, Jr. and
Simeon Kerr contributed to this article.
-
- Copyright 2003 Dow Jones & Company, Inc. All Rights
Reserved.
-
- http://www.quicken.com/investments/news_center/story/?story=NewsStory/dowJones
/20030828/ON200308280034000017.var&column=P0DFP
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