Contractors leaving Iraq

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U.S. private contractors, until now the biggest private-sector employers in Iraq, are preparing to leave as U.S. money runs out and Iraqi ministries take charge of the reconstruction effort.

“We are drawing down,” said Ken Oscar, Fluor Corp.’s vice president for strategy. “We are not done by any stretch of the imagination, but we are drawing down.”

The engineering and construction giant at one time had 250 to 300 people from the United States in Iraq, and employed roughly 20,000 Iraqis.

Now, as the U.S.-funded part of the reconstruction effort comes to a close, Fluor has, perhaps, 100 Americans left in the country and is phasing out the Iraqi jobs.

“The net [result] is a lot less employment for Iraqis,” Mr. Oscar said, even though much work remains to be done.

Most U.S.-funded projects are scheduled to be completed by the end of this year, and it is unlikely that any significant new U.S. funds will be forthcoming. Iraqi government ministries, which will be taking over responsibility for the reconstruction effort, tend to issue much smaller contracts that do not interest large U.S. companies.

“Congress has made it clear that it will not provide any more money,” said retired Col. Paul Hughes of the United States Institute of Peace. “Those [companies] with existing contracts will fulfill those, while hoping for new funding sources from the international community.”

The World Bank said in 2003 that it would take $56 billion to rebuild Iraq’s infrastructure. The United States appropriated $18.7 billion toward the effort, much of which has been allotted to specific projects.

The non-U.S. donor community pledged $13.5 billion to help restore Iraq, but few countries are willing to fulfill their pledges amid a raging insurgency and perceived political instability. About $1 billion of that money has been disbursed.

“It takes time to do these things,” Mr. Oscar said. “We got rid of their bad government, put them on their way to democracy and jump-started their infrastructure. Can [the Iraqis] pick it up from there? I don’t know.”

About 3,500 megawatts of electricity have been put online at a cost of $4 billion, Mr. Oscar said, but much of the work has been stopgap, such as refurbishing older plants rather than building modern ones.

“When summer comes, there may be serious power shortages,” he said.

Fluor’s experience is typical of the large U.S. contractors in the country. They did as much as they could given the security situation — which absorbed 20 percent of the $18.7 billion — and the time has come to leave.

“We are not here to rebuild the country,” said Brig. Gen. William McCoy, the Army Corps of Engineers commander overseeing the work. “We are here to give Iraq a jump-start.”

Some contractors say privately that they do not want to deal with the Iraqi government and that, without the protection and support of the U.S. military, it is simply not safe to work in Iraq.

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