Wednesday, November 01, 2006

The new SIGIR report: the bad, the bad and the good

I apologize in advance for the length of this entry. If it's any consolation the report itself was 537 pages. In a nutshell, the SIGIR report demonstrates just how essential proper oversight is to reconstruction efforts in Iraq. Anyway on to the blog:

On Tuesday, the Special Inspector General for Iraqi Reconstruction (SIGIR) released its quarterly report. Some of its findings:

Iraqi government is still spending very little of its own money on reconstruction projects and not for want of funds: it had $6 BILLION budgeted to major rebuilding projects this year

Of 142 primary health clinics funded by the United States, just seven are operational.

Perhaps one of its more sensational findings is that overhead costs have consumed more than half the budget on many reconstruction projects in Iraq, which of course leaves substantially less money than expected to improve the lives of Iraqis. The largest culprit is KBR a subsidiary of Halliburton whose overhead at the oil-facilities it was contracted to run accounted for 55% of its budget (approx. $160 million). Why so much? Halliburton sure isn’t too worried about the safety of its workers so I doubt it can all be going towards security.

Well apparently the US ordered KBR to Iraq and let them sit there for months at a time doing absolutely nothing. John Mitchell, a spokesman for the inspector general’s office explains,
“The government blew the whistle for these guys to go to Iraq and the meter ran. The government was billed for sometimes nine months before work began.”
Furthermore, the New York Times reports that,
“The findings are similar to those of a growing list of inspections, audits and investigations that have concluded that the program to rebuild Iraq has often fallen short for the most mundane of reasons: poorly written contracts, ineffective or nonexistent oversight, needless project delays and egregiously poor construction practices.”
Not surprisingly SIGIR also found that KBR sought to limit SIGIR’s oversight this quarter by improperly using the proprietary information exception to the Federal Acquisition Regulation. You can read more about that whole scandal here.

Sadly examples of poor construction practices abound and are especially prevalent in contracts for which there was little if no oversight. The construction of the Baghdad Police College has become the prime example for the failures of US reconstruction efforts. The College, which cost $75 million to construct, will likely have to be torn down due to leaking effluent (a nice way of saying human waste) caused by faulty plumbing that has compromised the structural integrity of the building. The Army Corps of Engineers handed out the police college contract out to the California firm Parsons which in turn subcontracted it to an Iraqi company. Needless to say Parsons didn’t really follow-up much with the subcontractors.

When it came time to build the police headquarters in Mosul, the Army Corps of Engineers realized how silly it was to go through firms like Parsons and started handing out the contracts directly to Iraqi firms. Good idea, except you still need some sort of oversight. The Mosul police HQ would suffer from similar problems as the police college. As a bonus, the station was also rife with shoddy construction that exposed security forces to unnecessary risk. This has implications beyond leaky faucets and the like: The US has been trying desperately to train the Iraqi police by stationing US troops with them. However, as should be expected, the US will not send their troops to stay in buildings like the headquarters in Mosul where they are easy targets.

SIGIR also revealed that 4% of the weapons that the United States had provided to Iraqi security forces could not be accounted for. That is 14,030 weapons unaccounted for. These weapons include semiautomatic pistols, assault rifles, machine guns and rocket-propelled grenade launchers. Nice.

So far SIGIR has done a commendable job in overseeing the reconstruction effort in Iraq. Due to its audits, SIGIR has saved US taxpayers approximately $405.1 million since its creation in 2004. It has proven itself to be a much-needed watchdog instrumental in spotting numerous cases of waste, fraud and abuse. With the possibility of transferring reconstruction efforts to the Iraqi government in the near future becoming ever more distant, SIGIR is needed more than ever. Tragically, Congress decided right before it recessed to terminate the office in exactly one year. It is not yet clear what will come in its place.

Before I forget there was some good news in the SIGIR report:
the average national electricity generation peak capacity finally surpassed prewar levels (only took us 2 ½ years)
Oil exports averaged 1.66 million BPD, slightly surpassing the Iraqi goal of 1.65 million BPD

U.S. projects have provided an estimated 4.6 million people with access to water—
more than half the anticipated end-state of 8.2 million people. Also, 5.1 million
people have access to sanitation services from U.S. projects; the end-state goal is
5.3 million people.
This is all great news and it appears that we can count on achieving relative success in several other sectors, but at issue is sustaining these US funded projects as programs shift to Iraqi control. The US has planned and allocated funds for this, but who knows how successful the transition will be. I am certain, however, that there would be a higher degree of success should SIGIR still be around at that point.

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