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Iraq Oil-Sector Audit Warns Gains at Risk

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The congressionally authorized Special Inspector General for Iraq Reconstruction on Jan. 13 released a final audit of southern Iraqi oil-sector reconstruction by Kellogg Brown & Root Services Inc. for the U.S. Army Corps of Engineers. KBR was working under a competitive, $1.2-billion-maximum contract awarded in January 2004. Due to modifications, often for government convenience, the end cost was $722.3 million. The audit says a lack of security, as well as poor pre-war maintenance by the Iraqis, drove up task-order costs. It says although the Iraqi government now has better facilities than before the war, “it is likely” the value of work will be “diminished or lost” unless Iraq maintains it properly and suggests that may already be a problem. It calls upon the Dept. of State to assess the issue and, if necessary, offer Iraq a support proposal.

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