By Emad Mekay
WASHINGTON, Mar 26 2003 (IPS)

Accused of limiting reconstruction contracts in Iraq to U.S. companies, the administration of President George W. Bush said Wednesday it would open some 900 million dollars worth of projects to sub-contractors from non-U.S. firms.

But at the same time, the administration has begun the process of seizing billions of dollars held by Iraq in the United States and other countries, which it intends to use to pay those contracts.

Accused of limiting reconstruction contracts in Iraq to U.S. companies, the administration of President George W. Bush said Wednesday it would open some 900 million dollars worth of projects to sub-contractors from non-U.S. firms.

But at the same time, the administration has begun the process of seizing billions of dollars held by Iraq in the United States and other countries, which it intends to use to pay those contracts.

USAID administrator Andrew Natsios told reporters Wednesday that the bidding process for rebuilding Iraq will soon open up for any company, including international ones, seeking sub-contracts from "primary U.S. firms".

"It will be completely competitive," said Natsios, adding that other countries, including Japan, Britain, Kuwait and Nordic nations, were signalling that they would put money towards the reconstruction of Iraq.

This, he said, would mean that those nations might want to give some contracts to their own local firms.

The contracts include work managing humanitarian and trans-shipment operations by air; emergency repair of electrical supplies, water and sanitation systems, roads and bridges and public buildings such as hospitals and schools; upgrading irrigation structures and port facilities; warehousing; customs clearance; trucking and provision of bottled water.

Iraq has suffered from a long war with Iran in the 1980s, followed by the 1991 Gulf war with the United States and 12 years of U.N. sanctions that left the country’s infrastructure neglected and ill-managed, so it could prove to be a bonanza for engineering and construction companies.

The New York-based Council on Foreign Relations estimates the cost of reconstruction at 20 billion a year for several years, while the administration has been floating an estimated figure of around 100 billion dollars overall.

But Washington’s decision to restrict reconstruction contracts in Iraq to gigantic U.S. companies that looked set to lock in profitable contracts, prompted accusations that the administration of President George W. Bush was seeking to benefit a select few U.S. companies rather than find the best, and possibly the cheapest, options for the Iraqi people.

After USAID waived the usual competitive bidding process, the awarding of contracts was seen to be shrouded in secrecy, and of benefit to firms that have relations with the administration, or links to the agency.

When no foreign companies were invited to tender for the spoils of war, European Union External Relations Commissioner Chris Patten described the U.S.-only bidding as ”exceptionally maladroit”.

But Natsios said Wednesday the deals would go to U.S. companies because of security concerns – getting clearance for any new firms would take too long. The companies bidding already have security classification, he added.

"Normally, we source American companies because it’s American taxpayers’ money," he said.

But that may not be entirely true. Only last week, Washington said it was seizing 1.7 billion dollars in Iraq’s money frozen during the 1991 war.

The administration said it was transferring the funds to a New York Federal Reserve account and earmarking the money for humanitarian relief and war efforts, without consulting the Iraqi people – the funds’ real owners.

Washington, backed by U.N. Secretary-General Kofi Annan, is also trying to seize between eight and 11 billion dollars in Iraq’s escrow account under the ”oil-for-food” programme, and redirect those oil revenues to fund humanitarian assistance and possibly reconstruction.

U.S. State Department officials have previously said that Washington would use some of Iraq’s oil revenues – about 20 billions dollars a year – towards reconstruction and the war effort.

But seizing the money and redirecting it to U.S. firms without consulting the Iraqi people is wrong, says one expert.

"This is absolutely illegal," said Phyllis Bennis, fellow at the Institute for Policy Studies in Washington. "It flies in the face of international law. You cannot just freeze the assets of a country and then later give them to somebody else."

Bennis said as the "belligerent occupying power", the United States is obligated to provide all the humanitarian needs of the Iraqi population.

"That means that all the oil-for-food money … that’s been sitting in the account, has to sit there until once again there is a legitimate government with sovereignty in Iraq, who then takes control of that money. That’s Iraqi money. It is not the U.N.’s money and it’s not Washington’s money."

On Monday, USAID awarded a 4.8-million-dollar contract to Seattle based Stevedoring Services of America to manage the Iraqi port of Umm Qasr, recently captured by invading U.S. and British troops.

It was the second of eight contracts worth another 900 million dollars to be awarded by USAID for rebuilding infrastructure.

Among the other major companies bidding for the primary contracts are heavyweights like Dallas-based Halliburton, whose former CEO is Vice President Dick Cheney, and San Francisco-based Bechtel, whose CEO Riley Bechtel was appointed last month by Bush to the President’s Export Council, an economic advisory panel.

Industry giant Schlumberger and Texas-based firms Weatherford International and Baker Hughes are also among the companies likely to win contracts in Iraq.

Natsios said he expects engineering and construction contracts to be awarded later this week or early next week.

Excerpt:

By Emad Mekay
WASHINGTON, Mar 26 2003 (IPS)

Accused of limiting reconstruction contracts in Iraq to U.S. companies, the administration of President George W. Bush said Wednesday it would open some 900 million dollars worth of projects to sub-contractors from non-U.S. firms.

But at the same time, the administration has begun the process of seizing billions of dollars held by Iraq in the United States and other countries, which it intends to use to pay those contracts.

USAID administrator Andrew Natsios told reporters Wednesday that the bidding process for rebuilding Iraq will soon open up for any company, including international ones, seeking sub-contracts from "primary U.S. firms".

"It will be completely competitive," said Natsios, adding that other countries, including Japan, Britain, Kuwait and Nordic nations, were signalling that they would put money towards the reconstruction of Iraq.

This, he said, would mean that those nations might want to give some contracts to their own local firms.

"More than 50 percent of the money that goes to the contracts will, in fact, go through sub-contracts, because these projects are so big and the time that they (primary contractors) have to carry out the requirements of the contract is so short," Natsios said.

Iraq has suffered from a long war with Iran in the 1980s, followed by the 1991 Gulf war with the United States and 12 years of U.N. sanctions that left the country’s infrastructure neglected and ill-managed, so it could prove to be a bonanza for engineering and construction companies.

The New York-based Council on Foreign Relations estimates the cost of reconstruction at 20 billion a year for several years, while the administration has been floating an estimated figure of around 100 billion dollars overall.

But Washington’s decision to restrict reconstruction contracts in Iraq to gigantic U.S. companies that looked set to lock in profitable contracts, prompted accusations that the administration of President George W. Bush was seeking to benefit a select few U.S. companies rather than find the best, and possibly the cheapest, options for the Iraqi people.

After USAID waived the usual competitive bidding process, the awarding of contracts was seen to be shrouded in secrecy, and of benefit to firms that have relations with the administration, or links to the agency.

When no foreign companies were invited to tender for the spoils of war, European Union External Relations Commissioner Chris Patten described the U.S.-only bidding as ”exceptionally maladroit”.

But Natsios said Wednesday the deals would go to U.S. companies because of security concerns – getting clearance for any new firms would take too long. The companies bidding already have security classification, he added.

"Normally, we source American companies because it’s American taxpayers’ money," he said.

But that may not be entirely true. Only last week, Washington said it was seizing 1.7 billion dollars in Iraq’s money frozen during the 1991 war.

The administration said it was transferring the funds to a New York Federal Reserve account and earmarking the money for humanitarian relief and war efforts, without consulting the Iraqi people – the funds’ real owners.

Washington, backed by U.N. Secretary-General Kofi Annan, is also trying to seize between eight and 11 billion dollars in Iraq’s escrow account under the ”oil-for-food” programme, and redirect those oil revenues to fund humanitarian assistance and possibly reconstruction.

U.S. State Department officials have previously said that Washington would use some of Iraq’s oil revenues – about 20 billions dollars a year – towards reconstruction and the war effort.

But seizing the money and redirecting it to U.S. firms without consulting the Iraqi people is wrong, says one expert.

"This is absolutely illegal," said Phyllis Bennis, fellow at the Institute for Policy Studies in Washington. "It flies in the face of international law. You cannot just freeze the assets of a country and then later give them to somebody else."

Bennis said as the "belligerent occupying power", the United States is obligated to provide all the humanitarian needs of the Iraqi population.

"That means that all the oil-for-food money … that’s been sitting in the account, has to sit there until once again there is a legitimate government with sovereignty in Iraq, who then takes control of that money. That’s Iraqi money. It is not the U.N.’s money and it’s not Washington’s money."

On Monday, USAID awarded a 4.8-million-dollar contract to Seattle based Stevedoring Services of America to manage the Iraqi port of Umm Qasr, recently captured by invading U.S. and British troops.

It was the second of eight contracts worth another 900 million dollars to be awarded by USAID for rebuilding infrastructure.

Among the other major companies bidding for the primary contracts are heavyweights like Dallas-based Halliburton, whose former CEO is Vice President Dick Cheney, and San Francisco-based Bechtel, whose CEO Riley Bechtel was appointed last month by Bush to the President’s Export Council, an economic advisory panel.

Industry giant Schlumberger and Texas-based firms Weatherford International and Baker Hughes are also among the companies likely to win contracts in Iraq.

Natsios said he expects engineering and construction contracts to be awarded later this week or early next week.

Excerpt: