[Organize] Bechtel pulling out of Iraq!

[david meieran]

Bechtel pulling out after 3 rough years of rebuilding work
- David R. Baker, Chronicle Staff Writer
Wednesday, November 1, 2006

http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2006/11/01/ 
MNGMIM3RAG1.DTL
Bechtel Corp. went to Iraq three years ago to help rebuild a nation  
torn by war. Since then, 52 of its people have been killed and much  
of its work sabotaged as Iraq dissolved into insurgency and sectarian  
violence.

Now Bechtel is leaving.

The San Francisco engineering company's last government contract to  
rebuild power, water and sewage plants across Iraq expired on  
Tuesday. Some employees remain to finish the paperwork, but  
essentially, the company's job is done.

Bechtel's contracts were part of an enormous U.S. effort to put Iraq  
back on its feet after decades of wars and sanctions. That rebuilding  
campaign, once touted as the Marshall Plan of modern times, was  
supposed to win the hearts of skeptical Iraqis by giving them clean  
water, dependable power, telephones that worked and modern  
sanitation. President Bush said he wanted the country's  
infrastructure to be the very best in the Middle East.

But Bechtel -- which charged into Iraq with American "can-do" fervor  
-- found it tough to keep its engineers and workers alive, much less  
make progress in piecing Iraq back together.

"Did Iraq come out the way you hoped it would?" asked Cliff Mumm,  
Bechtel's president for infrastructure work. "I would say,  
emphatically, no. And it's heartbreaking."

The violence that has gripped Iraq drove up costs and hamstrung the  
engineers who poured into the country after the U.S.-led invasion.

Bechtel's first reconstruction contract, awarded shortly after Saddam  
Hussein's overthrow in April 2003, assured the company that it would  
have a safe environment for its workers. But, by the end, dozens of  
Bechtel's employees and subcontractors had been killed, some of them  
kidnapped, others marched out of their office and shot. Forty-nine  
others were wounded.

Bechtel responded by hiring more guards, driving armored cars and  
fortifying its camps. Those steps ate up money that otherwise would  
have brought electricity and clean water to Iraqis.

The size of Bechtel's contracts also shrank over time, as U.S.  
officials diverted money from reconstruction and toward security.  
Instead of the nearly $3 billion originally budgeted, Bechtel finally  
received about $2.3 billion, a figure that includes money the company  
spent on projects as well as its undisclosed profit.

Mumm directed Bechtel's work from a bare-bones trailer in Baghdad. He  
is proud of his people for finding ways to work despite the threat of  
imminent death. Of 99 projects that the U.S. government directed  
Bechtel to complete, the company finished 97, abandoning only two for  
security reasons, the company says.

But Mumm's pride is mixed with frustration. Many of those completed  
projects later fell victim to collapsing security, which made  
maintenance dangerous and, in some cases, resulting in damage to  
plants and equipment.

He once hoped the new Iraqi government would turn into a steady  
Bechtel client, bringing the company lucrative new contracts in a  
country where virtually every road, power plant and waterworks needs  
repair.

"Had Iraq been a calmer place while we were there, amazing things  
could have been done," he said.

The U.S reconstruction push in Iraq is winding down. About $18  
billion in funding that Congress approved three years ago was  
supposed to be spent or committed to specific projects by the end of  
September. Two of the U.S. government agencies that have overseen the  
work are scheduled to close shop early next year. The United States  
and other countries are discussing another round of aid, but if it  
comes, Iraqi ministries are supposed to take the lead on rebuilding.

"That's really an under-told story -- we've stopped the  
reconstruction," said Frederick Barton, co-director of the Post- 
Conflict Reconstruction Project at the Center for Strategic &  
International Studies think tank. "There are some things we're still  
finishing up, but we're wrapping up, and we're stepping back. It's  
really a tragedy."

What exactly did Bechtel accomplish in its three years in Iraq?

-- The company helped repair 14 electrical generation units, built  
four new ones and created 25 substations around Baghdad.

-- It restored eight sewage plants and built one.

-- A canal bringing drinking water to Basra, Iraq's second-largest  
city, was dredged and its pumps restored. Seventy small water  
treatment plants were installed in rural areas.

-- Airports in Baghdad and Basra were repaired to handle civilian  
flights. The country's international shipping port -- Umm Qasr -- was  
dredged and its grain elevator refurbished.

-- Baghdad telephone switching stations knocked out during the war  
were restored, and the country's phone network was reconnected to the  
outside world.

-- War-damaged bridges on key highways were rebuilt.

-- Almost 1,240 schools were refurbished with new paint, fans and in  
many cases new windows and doors to replace those looters had stolen.

But many of these accomplishments were undone as security evaporated.

For example, Bechtel added 1,280 megawatts to the nation's power grid  
and improved the reliability of another 480 megawatts. In the United  
States, that much energy could light more than 1.3 million homes.

But Iraq's entire power system this summer produced 4,400 megawatts,  
just 442 megawatts more than before the invasion. The country needs  
about 9,000 megawatts to satisfy demand.

In some cases, the power plants have had trouble getting stable fuel  
supplies. In others, repaired plants were cut off from the national  
grid by sabotaged power lines. A series of coordinated attacks Oct.  
20, for example, severed Baghdad from power generated in the rest of  
the country, leaving the city's 7 million residents with only a few  
hours of electricity each day.

"Infrastructure is assumed by the terrorists, correctly, to be a  
target," said Michael Izady, a professor at Pace University who has  
trained U.S. forces in Iraq. "They're not stupid. You just hit the  
power grid, and you have 120 degrees outside. Ask any American what  
they'd do after two days of that. Tempers run really high."

Making matters worse, Iraqi workers haven't maintained some of the  
repaired electrical plants.

U.S. government auditors blame the problem on a lack of funding and  
the attitudes of Iraqi workers, who in the past rarely did  
maintenance unless something broke. Auditors visited one plant where  
new control systems had been bypassed, the blades of new turbines  
already had oil residue building up on them, and a fire had broken  
out -- a problem, since the fire extinguishing system was missing key  
parts.

Similar problems plagued water and sewage projects.

At Baghdad's Kerkh sewage plant, Bechtel spent $5.7 million repairing  
equipment that hadn't worked in months, maybe years. But the plant's  
location, on the edge of the city, became increasingly dangerous --  
turf for Hussein loyalists and criminal gangs. In November 2004,  
insurgents issued flyers telling the plant's Iraqi workers to stay  
home or die, according to Bechtel. Not long after, a power failure  
hit the plant, and the staff didn't turn on the backup generator. The  
plant stopped working.

"We'd get it completed, and then the Iraqis would all flee, and it'd  
get mortared," Mumm said. "It would operate for a while, then the  
same thing would happen. ... As we sit here today, I don't know if  
Kerkh is running or not."

Some places became too dangerous for Western and Iraqi employees  
alike. One of the projects Bechtel couldn't complete was a water  
treatment plant in Baghdad's Sadr City, a poor, crowded neighborhood  
dominated by Shiite militias. Bechtel's top project supervisors and  
the project's subcontractor fled to avoid assassination.

Violent intimidation also stopped another project -- a state-of-the- 
art children's hospital in which first lady Laura Bush had taken a  
personal interest.

The project, in Basra, was supposed to cost $50 million. The U.S.  
Agency for International Development assigned Bechtel the job in  
August 2004, with a completion date of Dec. 31, 2005. But Bechtel  
later warned its government supervisors that the hospital would take  
far more money and time to complete. The project was suspended this  
summer. Bechtel says the hospital now would cost $98 million. Federal  
auditors, who blamed USAID for not reporting the project delays and  
costs to Congress, say the figure is probably higher.

Basra had been quiet immediately after Hussein's fall. Its Shiite  
population suffered greatly under Hussein and was happy to be rid of  
him. But the calm was short-lived, as Shiite militias started to  
exert more and more control over the city.

Bechtel's hospital site security manager was murdered. The site  
manager received death threats and resigned. Bechtel's senior Iraqi  
engineer quit after his daughter was kidnapped. Twelve employees of a  
subcontractor in charge of the hospital's electricity and plumbing  
were killed in their offices. Eleven workers of another company  
supplying the project's concrete also died.

As the human cost of reconstruction rose, why didn't Bechtel pull out?

Mumm said the company constantly reviewed security and was convinced  
that it could keep its people safe.

"We didn't stay under duress," he said. "I think all of our people  
got in it, got involved in it, and no one wants to leave a job half- 
done."

He says the work hasn't been for naught. Even electrical or sewage  
plants that have broken down after Bechtel left can be revived if the  
country finds a way to quell the violence. If Iraq eventually  
stabilizes, the people Bechtel worked with may provide another  
opportunity to work in the country.

"Those people will be there, and I think they'll think favorably of  
us," Mumm said.

E-mail David R. Baker at dbaker at sfchronicle.com.