Iraqi Insiders Assess Reconstruction Opportunities by Sanjay Talwani With reports of possible Iraqi reconstruction costs pegging a future tab as high as $100 billion, companies large and small are wondering if their services could help the Iraqi people and at the same time make themselves some money. Participants in this rebuilding process donít have to belong to such companies as Halliburton or Bechtel (see Defense Insert, page C-5). Plenty of the work will go to subcontractors, government organizations, nongovernmental organizations and ultimately the Iraqi people, a panel of rebuilding insiders told about 150 assembled executives and high-level officials at a forum hosted by GlobeTrade Network on June 17 at the Philippine Embassy. ìItís going to take Iraqis, itís going to take international participation, and itís going to take participation of U.S. firms to be successful in the post-reconstruction effort,î said Tim Beans, chief acquisitions officer for the U.S. Agency for International Development (USAID). Paul Bremer, chief of the U.S. operation in Iraq, is sitting on a bank account of nearly $7 billion right now and has the authority to spend it, said keynote speaker Raymond DuBois, deputy undersecretary of defense. USAID has a few billion dollars more to spend and is getting ready to award a batch of three new contracts. But security remains the major limiting factor for would-be reconstruction contractors, with related costs gobbling up a big portion of the early estimates. Difficulties extend to everything else in the country, such as electricity, water and phones. There are no ATMs or credit card networks in Iraq, and anyone wanting to do business in the country had better pack a lot of cash, panelists warned. ìIf you donít have it, it ainít there,î said Dennis Wright, vice president of Halliburton Co. and its subsidiary, Kellogg Brown & Root. Wright has spent most of the past five months in Kuwait and, recently, Iraq. ìOperating in Iraq is unlike anything Iíve ever seen,î he said. Among the pitfalls related by panelists: The traffic is insane with massive military supply convoys crowding roads and accidents occurring often. Land and property records are wrecked, leaving ownerships in dispute, and there is little so far in the way of courts or other mechanisms to enforce contracts, so private investment may remain stalled. Even getting in and out of Iraq is no easy chore. The lucky few can catch a ride on U.S. Air Force transports, and a Jordanian airline is flying to Baghdad three times a week. But Wright said he prefers to drive the eight or 10 hours from Kuwait. Wright also showed some photos that he took to demonstrate the economic pillaging of the country by Saddam Hussein, comparing wrecked slums with the dictatorís multiple lavish palaces. Passing through towns, he said, child after child would smile and wave to the travelers. ìYouíd like to do something for them,î he said, ìbut what is it could you possibly do that will change their lives?î Thatís precisely where a lot of the projects come in. The educational system needs a major overhaul, replacing Baíath Party members and getting the basics back into the schools, said Charito Kruvant, president and chief executive officer of Creative Associates International Inc., which has a contract to assist Iraqís primary and secondary schools. One Bechtel subcontractor has been dredging mines from the port of Umm Qasr, and a dozen sunken ships have been pulled out. The port is now open for business and is receiving ships, Beans said. Bechtel is rebuilding port buildings and assessing the damage to the rail system, among its many jobs, and the airports in Baghdad and Basra are moving closer to regular civilian service. Baghdad also has power as much as 18 hours a day, and water service is up to 80 percent of its prewar conditions, DuBois said. Authorities have 8,700 Baghdad police back on the job in 18 stations. Contractors are even putting up cell phone towers around Baghdad to replace the destroyed telecommunications network. DuBois said bidding for the Iraqi telecom contracts will be free and open, although he noted upon audience questioning that details such as auctioning off frequencies still have to be worked out. ìUSAID is making, I believe, progress in a very, very difficult area,î Beans said. Beans was also quick to defend his agency against criticism that it had hastily and secretly given lucrative contracts to well-connected corporations, particularly Halliburton and Bechtel. He said USAID was asked to take on $1.7 billion in contracts under ìexpeditedî procurement procedures that were completely in accordance with federal rules and regulations. He also defended the early secrecy of the process. ìWe had to move very quickly,î he said. ìItís so easy to sit back and second-guess now as we watch TV. You have to remember that the timeframe these [contracts] were awarded was in the January, February, March timeframe, and in many cases, we had to be fairly secretive in the way we were doing this because we didnít want to undercut the president or the secretary of state.î Back then, Beans noted, administration officials were telling the world that war could be avoided if Iraq would give up its weapons of mass destruction. ìSo it didnít feel right for us to be going out to rebuild the country when the president was setting out a different message,î he said. Nevertheless, several contracts were awarded. Only one, a personnel support contract of up to $39.1 million, was a ìsole-sourceî award. All others, Beans said, were either limited or ìfull and openî bidding processes. In the case of Bechtelís construction contract, for instance, seven companies were involved. ìOne of the things that kind of irks me as a contracts person is to see the criticism in the paper of USAID doing limited competition,î Beans said. ìWe went to seven of the best firms in this country, and if you take a look at the firms that we went to, they were really the firms that can handle this stuff.î There is also another contract with the U.S. Army Corps of Engineers to oversee the Bechtel work, and other oversight contracts to help Beans make sure the American taxpayers get the most ìbang for the buck,î he said. Judging by the crowd in attendance at the discussion, multinational corporations figure the security problem in Iraq is only temporary. Philippine Special Envoy to the Middle East Jose Ibazeta said the rebuilding process will take time. ìWe have been through what Iraq has done,î he said, noting that Manila was leveled in World War II. ìYou have to do it in a manner knowing a little bit about the culture of the Middle East,î he added. ìYou have to give the people of Iraq the dignity that they deserve. They have a lot of pride.î And the near-daily potshots at coalition forces are not a sign of a broad-based, long-term populist revolt against the Americans, DuBois said. He called the resistance, ìindividuals who clearly know they have no future in free and democratic society,î and ìviolent remnants of embedded gangstersí networks of family and thugsî that control some populations through intimidation and murder. These people lack the popular sympathy and support that defines a true and viable guerrilla movement, he argued. The forum, titled ìRebuilding Iraq: Bringing the Global Community Together,î was organized by GlobeTrade Network, a Maryland-based organization that holds events to connect government and business officials and to promote global trade. GlobeTrade President Neil Ghosh said the message from the panelists lined up with his organizationís message: ìWeíve got to have a global alliance, not just the U.S. doing it on its own, whether itís rebuilding Iraq or fighting terrorism.î Sanjay Talwani is a freelance writer in Alexandria, Va.