- The Washington Times - Tuesday, February 3, 2004

U.S. companies bidding for massive reconstruction contracts in Iraq will spend more than $1 billion and employ up to 200,000 people to protect their staff and work sites, consultants say.

Companies bidding on the more than $18 billion of contracts being put out to tender by the Bush administration say security considerations will account for a major portion of their spending.

With the American contractor Kellogg, Brown & Root (KBR) reporting eight staffers or subcontractors killed and 39 wounded in Iraq, security has become almost an obsession.

The costs include armored vehicles, heavily defended facilities and small armies of guards to protect convoys, offices and work sites. Executives of companies working in Iraq seldom travel without a phalanx of well-armed bodyguards.

The security cost “is absolutely huge,” said Doug Hartman, chairman of the American Turkish Council’s construction committee and a Washington-based international consultant.

He and other security consultants said the expense is substantially more than companies spend in other politically unstable areas.

Oil companies in Indonesia, for instance, may spend large sums on securing a camp from attacks by local bandits. But in Iraq, contractors also will have to run armed convoys for supplies, maintain elaborate telecommunications systems and arm their guards with advanced weapons.

“This is organized political violence and very sophisticated,” Mr. Hartman said of the threat in Iraq.

With work soon to begin on more than 2,000 projects in Iraq, companies will have to decide how to secure hundreds of work sites, living facilities for thousands of employees and security for workers traveling to and from the job sites.

“The private armies that are going to be built are huge,” said Mr. Hartman. Recently back from a trip to Baghdad, he estimated that between 150,000 and 200,000 people would be involved in security operations.

Security officer Dave Smith said staff of many U.S. and European contractors have taken to scouring the streets for black-market weapons to beef up their arsenals.

“Contractors die every day over there, and it’s all being hushed up,” Mr. Smith said in Kuwait during a visit from Iraq.

Large U.S. contractors like KBR “should be supplying these guys with the appropriate equipment to defend themselves, [but] no one will supply us with guns,” added Mr. Smith, who has his own security firm based in the Philippines.

“We have to get them off the street. MP5s are all bought on the street.”

Mr. Smith said an MP5 submachine gun costs from $500 to $1,000 in Iraq, while an AK-47 assault rifle can be purchased for as little as $70 to $100.

He said he was aware of one KBR employee who was killed shortly after calling his wife to say he was on his way home, and another who was hit by rocket fire in the Palestine Hotel.

During another week, two Frenchmen working for Steel Foundation were killed.

KBR spokeswoman Patrice Mingo said the company has had four employees and four subcontractors killed in Iraq “due to hostile action,” while 26 employees and 13 subcontractors have been wounded.

Company policy would not allow Mrs. Mingo to comment on steps the company is taking to protect its workers, but she said KBR strictly prohibits employees from obtaining weapons from local suppliers.

Bechtel, another major contractor with about 100 American employees in Iraq, also bars its non-security personnel from carrying arms.

“We’ve got trained professionals who focus on security. We’ve got security personnel with them 24 hours,” said company spokeswoman Alison Abbott.

As far as buying weapons on the street, Miss Abbott said: “We follow all federal regulations. If individuals are doing something like that, that’s something we would have to take a hard look at.”

Bechtel refused to say whether any of its staff had been killed or injured, citing security concerns.

Casualties could rise further in March and April when thousands of contractors are expected to arrive in Iraq to work on new projects in the electrical, water, security, transportation, housing and oil sectors.

Private security companies, both Iraqi and foreign-based, will have to expand rapidly to meet the challenge, taking over the defense of everything from buildings and infrastructure projects to workers and company executives.

Even investors who prefer to keep a low profile, eschewing armed bodyguards, flak jackets and fast-moving sport utility vehicles for inconspicuous sedans with local drivers, say good security is the key to working in Iraq.

Burak Talu, vice president of business development for the Turkish Alarko contracting group, said his organization likes to work as much as possible “with local people in the area, because security ultimately comes from providing jobs to the local people and getting the community involved.”

But, he said, the risk varies from project to project. Companies building military bases for American troops, for example, are likely targets of attack.

“Everything you do with Americans, eventually you will become a target. Once you are spotted, you cannot be so low profile anymore,” Mr. Talu said.

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