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http://www.boston.com/dailyglobe2/070/nation/US_expects_to_award_massive_contract_to_rebuild_Iraq+.shtml

    
Boston Globe
March 11, 2003

POSTWAR PLANS
US expects to award massive contract to rebuild Iraq 
By Peter Slevin and Mike Allen, Washington Post


 
WASHINGTON -- The Bush administration, preparing what
would be the most ambitious US 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,
officials said yesterday. 

The massive umbrella contract, the first to be
awarded, would pay for construction and repairs to
roads, bridges, schools, hospitals, and mosques,
officials said. Other large deals are under
negotiation to jump-start a reconstruction effort that
would follow an overthrow of President Saddam Hussein.


Several US 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. 

US officials, wary of a potential backlash to a US-led
invasion and military occupation, hope to convince
Iraqis, by showing fast results, that the attempt to
overhaul Iraq merits their support. Officials think
they can win over hearts and minds by feeding hungry
Iraqis, delivering clean water, and helping to pay
teachers and health workers while a new government is
constructed. 

The US Agency for International Development 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. 

US 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, US 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, coauthor 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 US
contractor in Afghanistan. 

The move bypassed the usual rules that would have
permitted a wider pool of companies to seek the
contract, first reported by Time magazine and The Wall
Street Journal. 

Vice President Dick 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 possible Iraqi oil well fires. 

The ''urgent circumstances and the unique nature of
this work'' justify the procedures, USAID spokeswoman
Ellen Yount said. 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 think 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
would manage the oil industry during an early
post-conflict period. 



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