U.S. says end near for cash for Iraq's rebuilding

BAGHDAD, Iraq — The Bush administration does not intend to seek any new money for Iraq reconstruction in the budget request going before Congress in February, officials say.

The decision signals the winding down of an $18.4 billion U.S. rebuilding effort in which roughly half the money was eaten away by the insurgency, a buildup of Iraq's criminal-justice system and the investigation and trial of Saddam Hussein.

Just under 20 percent of the reconstruction package remains unallocated. When the last of the $18.4 billion is spent, U.S. officials in Baghdad have made clear, other foreign donors and the fledgling Iraqi government will have to take up what authorities say is tens of billions of dollars of work yet to be done merely to bring reliable electricity, water and other services to Iraq's 26 million people.

At the same time, the hundreds of Americans and Iraqis who have devoted themselves to reconstruction point to 3,600 projects the United States has completed or intends to finish before the money runs out around the end of 2006.

The projects include work on 900 schools, construction of hospitals and nearly 160 health-care centers and clinics, and repairs on or construction of nearly 800 miles of highways, city streets and village roads.

Still, "The U.S. never intended to completely rebuild Iraq," Brig. Gen. William McCoy, the Army Corps of Engineers commander overseeing the work told reporters recently. Last week, McCoy said: "This was just supposed to be a jump-start."

$2.5 billion shift

Since the reconstruction effort began in 2003, midcourse changes by U.S. officials have shifted at least $2.5 billion from the rebuilding of Iraq's decrepit electrical, education, water, sewage, sanitation and oil networks to building new security forces for Iraq and a nationwide system of medium- and maximum-security prisons and detention centers that meet international standards, according to reconstruction officials and documents.

Many of the changes were forced by an insurgency fiercer than the United States had originally expected.

In addition, from 14 to 22 percent of the cost of every nonmilitary reconstruction project goes toward security against insurgent attacks, according to reconstruction officials in Baghdad.

In Washington, the office of the Special Inspector General for Iraq Reconstruction puts the security costs of each project at 25 percent.

Much bigger army

U.S. officials more than doubled the size of the Iraqi army, which they initially planned to build to only 40,000 troops.

Item-by-item inspection of reallocated money reveals how priorities were shifted rapidly in response to dangers posed by a new Iraq: a 300-man Iraqi hostage-rescue force that authorities say stages operations almost every night in Baghdad; more than 600 Iraqis trained to dispose of bombs and protect against suicide bombs; four battalions of Iraqi special forces to protect the oil and electric networks; safe houses and armored cars for judges; $7.8 million worth of bulletproof vests for firefighters; and a center in Kirkuk for treating victims of torture.

The insurgency has set back efforts across the board. In two of the most crucial areas, electricity and oil production, relentless sabotage has kept output at or below prewar levels despite hundreds of millions of American dollars and countless man-hours.

Oil production stands at roughly 2 billion barrels a day, compared with 2.6 billion before U.S. troops entered Iraq in March 2003, according to U.S. government statistics.

The electrical grid has an average daily output of 4,000 megawatts, about 400 megawatts less than its prewar level.

Still in dark

Iraqis nationwide receive on average fewer than 12 hours of power a day. For residents of Baghdad, it was six hours a day last month, according to a U.S. count, though many residents say that figure is high.

The Americans, said Zaid Saleem, 26, who works at a market in Baghdad, "are the best in destroying things but they are the worst in rebuilding."

In a speech Aug. 8, 2003, President Bush promised more for Iraq.

"In a lot of places, the infrastructure is as good as it was at prewar levels, which is satisfactory, but it's not the ultimate aim. The ultimate aim is for the infrastructure to be the best in the region," Bush said.

U.S. officials at the time promised a steady supply of 6,000 megawatts of electricity and a return to oil-production output of 2.5 million barrels a day, within months.

But the insurgency changed everything.

Security briefing

"Good morning, gentlemen," a security contractor said late last week, launching into a security briefing in what amounts to a reconstruction war room in Baghdad's Green Zone.

Other private-security contractors hunched over desks in front of him, learning about the roughly 200 missions planned that day to serve the 865 U.S. reconstruction projects under way — taking inspectors to work sites, guarding convoys of building materials or escorting dignitaries to see works in progress, among other jobs.

A screen overhead detailed the previous day's 70 or so attacks on private, military and Iraqi security forces.

The briefer noted bombs planted in potholes, rigged in cars, hidden in the vests of suicide attackers. There were also mortar attacks and small-arms fire.

The briefer noted miles of roads rendered impassable or inadvisable owing to attacks, and some of the previous day's toll in terms of dead and wounded.

Colored blocks on the screen marked convoys en route, each tracked by transponders and equipped with panic buttons.

Unanticipated expense

The heavy emphasis on security and the money it would cost had not been anticipated in the early months of the U.S. occupation.

But as the insurgency grew, money was shifted from other sectors, including more than $1 billion meant for electricity, to build a police force and army capable of combating foreign and domestic guerrillas.

In addition to training and equipping police and soldiers, money has been spent for special operations and quick-response forces, commandos and other special police.

In the process, the United States will spend $437 million on border fortresses and guards, about $100 million more than the amount dedicated to roads, bridges and public buildings, including schools.

Education programs have been allocated $99 million; the United States is spending $107 million to build a secure communications network for security forces.

Elections costly

Hundreds of millions of dollars were shifted to pay for elections and to take Iraq through four changes of government.

Money also was reallocated to provide a $767 million increase in spending on Iraq's justice system. The money has gone toward building or renovating 10 medium- and maximum-security prisons — early plans called for four prisons — and for detention centers nationwide.

The criminal-justice spending has been intertwined with the drive to try Saddam. The costs have been high, including $128 million to exhume and examine at least five mass-grave sites.

"Reconstruction gap"

The shifts in allocations have led Stuart Bowen, the inspector general in charge of tracking the $18.4 billion, to talk of a "reconstruction gap," or the difference between what Iraqis and Americans expected from the reconstruction at first, and what they are now seeing.

The inspector general's office is now conducting an audit to quantify the gap between expectations and performance, spokesman Jim Mitchell said.

McCoy, the Army Corps of Engineers commander for reconstruction, cites a poll conducted last year that found less than 30 percent of Iraqis knew of any reconstruction efforts. The percentage has since risen to more than 40 percent, McCoy said.

U.S. officials say comparatively minor sabotage to distribution systems is keeping Iraqis from seeing the gains from scores of projects to increase electricity generation and oil production.

To showcase a rebuilt school or government building, meanwhile, is to invite insurgents to bomb it.

Easy to repair

If 2006 brings political stability and an easing of the insurgency, Americans say, the distribution systems can be fairly easily repaired.

"The good news is this investment is not in any way lost; they're there," said Dan Speckhard, the director of the U.S. reconstruction-management office in Iraq.

"They will pay off, they will be felt, if not this month, then six months down the road."

While the Bush administration is not seeking any new reconstruction money for Iraq, commanders here have military discretionary money they can use for small reconstruction projects.

The U.S. Agency for International Development is expected to undertake some building projects, as it does in 80 other countries with money from the foreign-appropriations bill.

Washington Post reporter Naseer Nouri contributed to this report.