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Plans Laid for Next Phase As Iraq Rebuild Continues
By Tom Sawyer, Thomas Armistead, Sherie Winston and Tom Ichniowski

Despite the rising tide of insurgent violence in Iraq in October, Bush administration claims and field reports show solid progress is being made in reconstruction.

U.S. officials say oil production is rising and electrical generation has returned to prewar levels. Industry sources also report progress is being made in the transportation and water sectors and in military base construction, as well as the revival of general business activity.
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Congress and the administration are about to decide which federal agencies will award future construction contracts and the value of those contracts. At ENR press time on Oct. 14, both the Senate and the House were fine-tuning legislation to authorize about $18 billion for Iraq reconstruction as part of a fiscal 2004 emergency supplemental bill. It would authorize a total of nearly $87 billion for military operations and rebuilding.


The final bill also will determine the amount of the second-phase construction contract now out for bid by the U.S. Agency for International Development. The request for proposals, with no dollar amount, was published Oct. 1 on the USAID Website. Bids are due by Oct. 31. However, there is a possibility that USAID will not award the phase-two construction contract, says agency spokeswoman Ellen Yount. The award is subject to congressional funding, she says.

Yount notes that the Coalition Provisional Authority, which is expected to oversee a new contracting office to administer the next round of funds, does not have government contracting authority. "It is a coalition," she explains. It is possible that several government agencies may award contracts, but the details are still being worked out, she says. "We understand the [new agency] will have an oversight and coordinating role," Yount said.

Still, groundwork to set up an open-contracting and program-management structure under CPA is moving ahead. Retired Navy Rear Adm. David Nash, former head of Naval Facilities Engineering Command, is in Baghdad setting up a team to manage the next infrastructure reconstruction program (ENR 9/29 p. 12). Nash says he and a small staff are designing an organization to administer the program. The team will have U.S. civilians, military construction and administration experts, as well as Iraqis.

"We’ve offered to help out Dave Nash," says Lt. Gen. Robert B. Flowers, the Army’s Chief of Engineers. "We’ve offered our services to be the executor for construction if he needs it done, and to provide contract oversight."

Nash also is pulling in experts like Deidre Lee, the Pentagon’s senior procurement officer. "Initially she’ll work from Washington because that’s where all the activity will be for a while," Nash says. He is reluctant to talk specifically about planning, explaining that it is being "rehashed and refined" and he doesn’t want to send confusing messages. Plans may change if "detailed guidance" emerges in the final spending package.

Project and enterprise management technology will play a big role, Nash says. The World Bank has estimated Iraq can absorb only $6 billion in reconstruction work next year, yet the program Nash is preparing is planning for about 2 1/2 times that amount, probably over a longer term. Nash says that the work would be spread around the country and the ambitious program could be achieved by using robust management tools. "Technology has got to be one of our sources of leverage," Nash says. "We have to be sure we are as transparent as possible." He says he will seek an "off-the-shelf," well-tested, Web-based project/enterprise management system. A request for proposals is being drafted.

"We are making progress and there are a lot of great things happening," says Nash. "My goal is to keep on doing that and get the job done."

BUSY State Company for Oil Projects workers pour generator pad at Basra Refinery in August.
(Photo courtesy of USACE/Task Force Rio)

On Oct. 9, U.S. Ambassador L. Paul Bremer said power generation in Iraq hit 4,518 Mw on Oct. 6, exceeding the prewar average, which the United Nations Iraq Program estimated between 4,300 and 4,400 Mw in November 2002.

Generation has edged upward since early July, thanks to "a combination of repair and replacement of parts and integral components of the facilities," says Cynthia Huger, Baghdad-based spokeswoman for Bechtel, San Francisco.

Eighteen power facilities throughout the country "were either in a forced outage or operating at reduced levels averaging at 30% to 40% reliability," Huger says. Electricity ministry employees, Iraqi subcontractors, international specialty contractors and Bechtel engineers tackled a multitude of problems, she notes. Finding parts for obsolete equipment is a continuing problem. "Many of the facilities are decades old [and] most of the replacement parts are from manufacturers who are no longer in business," Huger says.

The transmission grid remains in poor condition, with about 1,100 towers, or 26% of the primary 132-kv and 400-kv grid out of service. "Transmission lines are down in all parts of the national grid," says Huger. "The next goal for the power sector is to achieve 6,000 Mw of reliable power before the summer peak next year." Part of the increase will come from about 1,000 Mw of new gas-turbine generators.

Field Reports From Iraq

ENR editors monitor a continuous flood of information about the situation in Iraq and the progress of reconstruction. The data provides an ever-changing view of the conditions there. This field update was developed from press statements, e-mail communications and live, or telephone interviews our editors have gathered on the subject recently from numerous sources.

Included are comments several military contacts, including Lt. Gen. Robert B. Flowers, the Army's Chief of Engineers, from an interview on Oct. 6; Col. Gregg Martin, commander of the U.S. Army's 130th Engineer Brigade and the chief combat engineer of the army's ground troops in Iraq; Col. Martin's deputy, Lt. Col. David (Mark) Holt, who is tasked with facilities development.

Comments from Cynthia Huger, Baghdad-based spokeswoman for Bechtel, are also included.

Military engineers

Via e-mail, Lt. Col. Holt reports the Army's forces engineers are very busy on three large-scale tasks:

Standing Up the New Iraqi Army—"The facilities program led by U.S. Army Engineers is really driving much of the new army policy. Facilities decision are forcing the operational decisions for building and employing the army. And they are building some excellent facilities at extremely reasonable costs, and partnering fully with Iraqi counterparts," Holt says.

MUNITIONS Caches turn up everywhere in Iraq. (Photo by Tom Sawyer for ENR)

Captured Enemy Ammunition Disposal— Holt says the Coalition has teamed with the U.S. Army Corps of Engineers to bring in contractor explosive ordnance demolition and unexploded ordnance experts to destroy or safely store over 600,000 tons of Iraqi munitions and ordnance. Four contracts of one-year duration totaling $286 million have been awarded, and contractors are starting on the work. "They are efficiently replacing army units to do other tasks," Holt says. Six operations sites are to be established in next several months.

The contractors will eventually take over blasting, storage, transportation and associated life support missions. He predicts the program will last at least couple years. "The magnitude of the problem is truly staggering and the success thus far truly impressive," Holt says.

Prime Power soldiers Staff Sgt. Brett Knutson (left) and Staff Sgt. Mark Kromer, 249th Engineer Battalion from Seitzingen, Germany, prepare wiring for a branch circuit in to refrigerate Army and Air Force Exchange Service storage containers. (Photo courtesy of 130th Engineer Brigade)

U.S. Base Construction—The third major mission the army's engineers are engaged in is building facilities for the bed-down of U.S. forces. "Again the numbers are staggering," Holt says. Most of work is being done through KBR. "Interesting program in the several billion dollar range," Holt says.

"All of these missions are an interesting mix of Engineer Troops—Active, Guard and Reserve—USACE and contractors, depending on the needs of the mission, relative capabilities and competencies, and availability to do the job," adds Col. Martin.

"Engineer troops continue to do it all, with every type of engineer unit. We're also doing a lot of humanitarian civic action for the Iraqis and playing a key role in training the Iraqi Civil Defense Force," Martin says.


The transmission grid remains in bad condition with 800 of 3,100 kilometers of the primary 132-kv and 400-kv grid out of service, wrote Bechtel's Huger recently in response to e-mailed questions. "Transmission lines are down in all parts of the national grid: north, heartlands and south,"

"In the north, 132-kv transmission lines connecting the Kurdish Zone with the national grid are down. In central Iraq, 400-kv transmission lines connecting northern and western power-generation plants with Baghdad are down, as well as portions of the 400-kv grid around Baghdad. In the south, two key 400-kv transmission lines connecting southern generating plants with Baghdad are down, as well as primary 132-kv transmission lines to key users in the southern area," Huger says.

Huger reports the Ministry of Electricity, with assistance from Bechtel, Task Force Restore Iraqi Electricity and the USACE are restoring 400 kv lines to connect northern powerplants to the southern regions, with Baghdad being a priority. The goal is to maintain 6,000 Mw, 18 hours per day, before hot weather returns next summer.

Turbine deck at Bayji power plant
(Photo courtesy of Bechtel)

Engineers are planning to use scheduled maintenance windows in the fall and spring to repair and upgrade equipment and increase production. Bechtel and the Ministry of Electricity have written several hundred material requisitions for services, materials, tools and equipment to support the program.
Materials needed are replacement parts for steam turbine generators, pumps, piping components, electrical components, instrumentation and controls, boiler tubes, as well as structural items. Orders are also being placed for gas turbine generators for new generation facilities.

The process of restoring generation has been a combination of repair and replacement of parts and integral components at 10 gas turbine and 8 thermal facilities scattered across the country. It has included repairing leaking boiler tubes, adjusting fans, troubleshooting vibration problems, and replacing worn turbine bearings and corroded solenoid valves. Facilities were either in a forced outage, or were operating at reduced capacity, averaging between 30% and 40% reliability. Ministry of Electricity employees, local subcontractors, international specialty subcontractors and Bechtel engineers have performed the work.

Huger says the difficulty of finding parts has slowed some of the repairs. "Many of the facilities are decades old. Most of the replacement parts are from manufacturers who are no longer in business." Problems include the difficulties of finding parts for obsolete equipment, or properly identifying parts when the clues must be deciphered, one-by-one, from among sometimes many name plates on pieces of equipment that are either completely, or partially destroyed.

USACE's Gen. Flowers, who has visited Iraq four times since May, says his perspective has given him what he calls "four snapshots in time."

"Every time I've been over there, things are better," he says. For example, the increased power production means, "You're talking about Baghdad having power after 10 o'clock at night." In addition, "there's a plan in place now for developing a maintenance system for the infrastructure," Flowers says.

In transcripts of testimony before House Appropriations Foreign Operations Subcommittee in Washington, D.C. on Sept. 30, U.S. Agency for International Development Administrator Andrew S. Natsios shed light on developments in the sector and the strategy being used:

"We are increasing power reliability and reducing security costs by disconnecting some plants from the vulnerable power grid and installing smaller generators at each facility. This will make sewer and water treatment plants independent of the power grid and much easier to protect from terrorist attacks," Natsios testified.

Water utilities

Waste treatment plants are getting generators to give them independence from the grid.
(Photo courtesy of DOD)

Natsios also provided insight into the steps being taken to repair the water and sewer infrastructure. "We have helped Iraqi municipal governments repair over 1,700 pipe breaks in Baghdad's water network, increasing water flow by 200,000 cubic meters per day…" and, "we have rehabilitated 70 of Baghdad's 90 non-functioning waste pumping stations; and we began installing generators at 37 Baghdad water facilities and pumping stations," as well as at an additional eight water treatment and pump stations in the south.

In Mosul, 101st Airborne Division reports that soldiers from it's 926th Engineer Group are working with Bechtel and USAID on a what promises to be a multi year project to rebuild the city's four-plant sewerage system. Currently less than 2% of the Mosul's 1.8 million people are on a functioning system. The CPA is spending more than $2.5 million replacing outdated and broken equipment.


Iraqi telephone ministry employees splicing 1,800 pair cable for termination in new containerized switches in Baghdad.
(Photo courtesy of Bechtel.)

Three companies were chosen Oct. 6 to build the country's first national mobile telephone system. Asia-Cell won the bid to start work in the north, Orascom in the central region and Atheer in the south. Service was expected to start appearing within weeks.

Under the terms of the award, each company is required to concentrate in its region, but once a pre-set level of service has been reached, the company is free to expand beyond its territory and challenge the others. The arrangement is expected to give all the companies a strong incentive for a fast build-out.

USAID's Natsios in his testimony Sept. 30 also reported that Bechtel has awarded sub-contracts for 12 containerized telephone switches and one satellite gateway for international telephone calls. "The projects will restore international calling for Iraq and reconnect all 240,000 phone lines in Baghdad presently without service, returning the city to pre-conflict level of 540,000 operational phone lines." Natsios said. He said the work would be accomplished "between late October and mid-January, approximately one every week."

He also said work was continuing to "complete repairs to the nation's fiber optic network from north of Mosul, through Baghdad and Nasiriyah to Umm Qasr by November," and mentioned "repair of the 2,000-km fiber optic cable that will connect 20 cities to Baghdad."

Business development

Recent indicators about the general business climate, and how it may affect American firms intending to work in Iraq include Coalition Provisional Authority Order 39, issued Sept. 19, establishing—in coordination with the Iraqi Governing Council—the terms and procedures for making foreign investments. The stated intention is to attract investment by establishing safeguards for the rights and property of investors and by establishing a system of registration and regulation. A few days later, the Iraqi minister of finance, Kamel Al-Gailani issued a statement that the economic and financial reform work with the CPA was continuing on rules governing a central bank, international bank entry, taxes and tariffs—including a flat 5% reconstruction surcharge on all imports except humanitarian goods.

USACE's Gen. Flowers says the Corps has taken the lead in promoting contacts between U.S. and Iraqi engineers. For example, the American Society of Civil Engineers is working with Iraqi civil engineers to develop standards, he says. "They have some excellent engineers there and they're just starved for professional standards and contacts. That's been a very successful thing, and I'm optimistic," Flowers says.

New currency began to circulate Oct. 15. Iraqis have until Jan 15 to exchange old currency for new on a one-to-one basis. More denominations and greater security against counterfeiting are expected to help stabilize the economy. The elimination of Saddam's mug on the money and the appearance of crisp new bills is also expected to have a positive psychological effect.

NEW MONEY The new notes replace images of Saddam (top) with images from Iraq's heritage such as great structures, scientists and their achievements, as well as the newly reconstructed grain elevator at the near Basra, capable of offloading 60,000 tonnes per hour.

Tenders are also circulating for all kinds of materials and work. There are many sources of information, but from within Iraq the Coalition Provisional Authority has a Website at with a button at the bottom of the page for business solicitations. Regional reports linked from the page also include business opportunities. In the north region, an on-line Kirkuk Business Center has been created with U.S. Army assistance. Its regular, English-language newsletter is available for download.

The Oct. 1 issue of the Kirkuk newsletter included a feature on the owner of an asbestos pipe plant looking for financial backers to help him convert it to manufacture glass reinforced plastic pipe for utility construction. Significant funds for utility projects are available, but the price of imported materials is driving up costs. Kirkuk city engineers are hoping to develop a local GRP pipe supply.

The newsletter also includes a report on private venture re-development of the city's train station, a story about private company bus company resuming regular passenger service to the Turkish border, with connections to Istanbul, and a classified section listing other business opportunities.


Security, and its effect on reconstruction, remains the 300-pound gorilla in Iraq. But it is difficult to get a comprehensive and fair feel for how it affects activities there. News reports are always incident driven, so by their very nature, the incidents being reported are almost always very bad.

An alternate window into the situation, however, is offered by Centurion Risk Assessment Services. The company is a U.K.-based training and risk assessment firm run by former British soldiers that specializes in providing services to journalists and aid workers operating in hostile environments. Its trainers currently on assignment in Iraq have been filing comprehensive incident reports on the company's Website every 10 days or so that give broad view on changing conditions around the country, trends, and sometimes advice. The reports can be found under the "aid safety net" tab at

Security of the electrical transmission facilities is one of the main challenges facing reconstruction, says Bechtel's Huger. Without divulging sensitive details, Huger would only say, "The current levels of transmission will be sustained. Security is improving on protection of the transmission lines through the efforts of the CPA." Security is a CPA responsibility, she added.

In the final analysis, Flowers points out that infrastructure reconstruction is much more than a matter of engineering. "I believe there's a correlation between the infrastructure and security," he says. "The better the infrastructure gets and the better the perception of the Iraqi individuals' quality of life is, the less they will tolerate foreign fighters coming in and attacking Americans, which only disturbs their life." He says the population is starting to turn this corner. "More and more people are coming to the new Iraqi police or coalition forces and saying, ‘There's a foreigner who's moved in and they have some weapons. Here's where they're at.' "


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