US Doubles Value Of
Contracts For Iraq Oil Repairs
By Joshua Chaffin
The Financial Times - UK
10-30-3
WASHINGTON -- The US will double the value of contracts to repair
Iraq's oil sector to $2bn (£1.1bn) to cover the rising costs of
security and sabotage there.
The government will also push back the awarding of the new contracts
again, to as late as December.
That delay will swell payments to Kellogg, Brown and Root, the
Halliburton subsidiary that has already reaped more than $1.5bn from
the rehabilitation of Iraq's oil industry since it was granted an
emergency "bridge" contract in March without any competition.
It will provide further ammunition for critics who claim that
Halliburton, which was run by vice-president ***** Cheney from 1995 to
2000, is profiting at the expense of US taxpayers.
The growth of the oil contracts illustrates the difficulties the US
and its allies are facing as they try to stabilise postwar Iraq.
US and Iraqi authorities are trying to boost oil production from
current levels of about 2m barrels a day to 2.5m in March next year
and 3m by the end of the 2004.
The two contracts, one for the northern part of the country and one
for the south, were originally valued at up to $500m each and were
designed to replace the Halliburton contract this month.
But the US Army Corps of Engineers said rising incidents of sabotage
and the poor state of the infrastructure led them to believe the
contracts would run out of funding in three to six months if they were
not increased.
"We fix something and protect it and they find a way to screw it up
elsewhere," said Bob Faletti of the Corps of Engineers. "We are
constantly trying to stay ahead of them."
In addition to repairing the immediate damage from pipeline attacks,
US and Iraqi workers have been trying to strengthen alternative routes
and facilities to make the system less vulnerable.
The maximum value for the northern contract will now be $800m, while
that of the southern contract will be $1.2bn. The bidders, whose names
were kept confidential, will be given seven days to revise their
proposals.
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"life is like a mushroom, they feed you ***** and keep you in the dark"
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