Cheney's Halliburton, Others to Cash in on IraqWar (tm)
Massive corporate welfare program machinery to be lubricated by Iraqi, American blood; Dick Cheney, draft-dodger, counts his $36 million in Halliburton stock proceeds.
Companies Selected to Bid on Iraq Reconstruction
Initial $900 Million Contract Would Pay for Rebuilding of Roads, Bridges and Other Infrastructure
By Peter Slevin and Mike Allen
Washington Post Staff Writers
Tuesday, March 11, 2003; Page A13
The Bush administration, preparing what would be the most ambitious U.S. rebuilding project since the aftermath of World War II, expects in coming days to award a construction contract worth hundreds of millions of dollars to begin remaking Iraq, U.S. officials said yesterday.
The huge umbrella contract, the first to be awarded, would pay for construction and repairs to roads and bridges, as well as schools, hospitals and mosques, officials said. Other large deals are under negotiation to jump-start a reconstruction effort that would follow an overthrow of Iraqi President Saddam Hussein.
A few U.S. construction giants -- including the Bechtel Group Inc., Halliburton Co. and Fluor Corp. -- were invited to bid for the work on an emergency basis. Analysts said the companies hope to win the contract and position themselves for such future projects as the repair and development of the country's oil industry.
U.S. authorities, wary of a potential backlash to a U.S.-led invasion and military occupation, hope to persuade Iraqis, by showing fast results, that the extraordinary attempt to overhaul Iraq merits their support. They believe they can win hearts and minds by feeding hungry Iraqis, delivering clean water and helping to pay teachers and health workers while a new government is being constructed.
The U.S. Agency for International Development (USAID) is seeking companies to handle such projects as renovating the country's largest airports, resuscitating electrical grids and printing textbooks.
The administration will seek from Congress the billions of dollars necessary for the initial military and civilian postwar effort if the White House challenges Iraq with force. U.S. diplomats have been seeking financial commitments from other countries. Planners also hope Iraqi oil revenue can help pay for reconstruction.
The initial construction contract could be as large as $900 million, U.S. officials have said. One planner called the number a ceiling and predicted the actual amount of the umbrella contract would be lower.
"The United States is probably going to have to pick up the bulk of what's going to happen in reconstruction, at least at the outset," said Bathsheba Crocker, co-author of a report on post-Hussein Iraq at the Center for Strategic and International Studies. "It's acknowledged even by them that it's going to be a drop in the bucket compared to what the overall costs will be."
To speed the project, USAID invoked special authority to solicit bids from selected companies, which include the Louis Berger Group Inc., a significant U.S. contractor in Afghanistan. The move bypassed the usual rules that would have permitted a wider array of companies to seek the contract, first reported by Time magazine and the Wall Street Journal.
Vice President Cheney spent five years as chief executive of one competitor, Houston-based energy services company Halliburton. The Pentagon announced Thursday that Halliburton subsidiary Kellogg Brown & Root is developing a plan under an existing contract to fight Iraqi oil well fires.
The "urgent circumstances and the unique nature of this work" justify the procedures, said USAID spokeswoman Ellen Yount. Officials said the winner is certain to farm out work to other companies inside and outside Iraq.
Construction industry executives said the firms are competing fiercely in part because they believe it could provide an inside track to postwar business opportunities. A significant prize: oil industry contracts.
"It's a sensitive topic, because we still haven't gone to war, but these companies are really in a position to win something out of this geopolitical situation," an industry executive said. It remains unclear whether Iraqis, Americans or an international consortium will manage the oil industry during an early post-conflict period.
Steven L. Schooner, a George Washington University law professor, said many billions of dollars are at stake. He estimated that $900 million would barely last six months given the scope of the projects the administration has mapped out.
"The most sophisticated firms that come in first and establish goodwill with the locals obviously will reap huge benefits down the road," Schooner said. "These are going to become brand names in Iraq. That's huge."
Bechtel spokesman Jonathan Marshall said, "We hope for a peaceful settlement in Iraq, but if there is a role for U.S. companies in helping to rebuild Iraq's infrastructure, Bechtel would have the skills and would be well-suited for such a job."
The Americans have been working with the U.N. World Food Program and other U.N. agencies to manage Iraq's food distribution network and the care of displaced Iraqis. USAID has established loose targets for an immediate post-conflict period and the following 18 months, emphasizing that it expects the United States to have international help in fulfilling the goals.
On electricity, for example, USAID foresees the installation of 550 diesel generators within 60 days and the restoration of power to 75 percent of the 1991 level within 18 months. Officials caution that such plans are heavily contingent on the amount of wartime damage.
On education, USAID envisions the repair of 3,000 schools and the delivery of supplies to 12,500 schools. By that point, teacher training would be underway and U.S. universities would be providing expertise.
By 18 months, if the targets are met, basic health services would be available to all Iraqis and local government would be financially self-supporting, according to USAID predictions.
© 2003 The Washington Post Company
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