IRAQ: Rebuilding Found to Fall Short

Because of unforeseen security costs, haphazard planning and shifting priorities, the American-financed reconstruction program in Iraq will not complete scores of projects that were promised to help rebuild the country, a federal oversight agency reported yesterday.

Only 49 of the 136 projects that were originally pledged to improve Iraq's water and sanitation will be finished, with about 300 of an initial 425 projects to provide electricity, the report says.

The planners of the rebuilding effort did not take into account hundreds of millions of dollars in administrative costs, and mostly did not realize that the United States would have to spend money to keep things like power plants and sewage treatment plants running once they had been built, the report says. That ultimately forced the United States to pare the list of projects to cover such expenses.

Beyond the huge cost of protecting reconstruction projects, which the report says the planners did not foresee, billions of dollars were shifted from the rebuilding effort to things like training Iraqi police and guarding Iraq's borders. The report, by the office of the Special Inspector General for Iraq Reconstruction, adds that the overall rebuilding plan was also devised without a clear understanding of the decrepit state of Iraq's infrastructure after decades of war, United Nations-imposed penalties and sheer neglect.

The figures are the first quantitative measure of what Stuart W. Bowen Jr., the inspector general in the office that issued the report, has called the "reconstruction gap," the difference between what the United States originally promised to build and what it will actually complete. The inspector general is charged with oversight of the entire $25 billion rebuilding effort in Iraq, although the latest report focuses on projects financed by $18.4 billion appropriated by Congress for the program in 2004.

"We have gone beyond just the concept of the reconstruction gap and identified the specific impacts of how many projects in the electrical sector and the water sector will not be completed and the reasons why," said Jim Mitchell a spokesman for the office. "We point out that the dramatic increase in security spending is a part of this as well," Mr. Mitchell said. "Those who planned the reconstruction did not understand at the time the hostile environment in which reconstruction would be taking place."

Rick Barton, co-director of the post-conflict reconstruction project at the Center for Strategic and International Studies in Washington, said that the effectiveness of the rebuilding program had previously been obscured by the fog of war in Iraq, and that what appear to be some of the first solid measures of success and failure were bound to carry important lessons.

"We've had such a range of commentary, from pretty much everything going as well as it could to outright disaster," Mr. Barton said. "This brings definition to the whole discussion, and in doing that it highlights many of the poor choices that have been made. It has that potential longer-term therapeutic benefit."

Reconstruction officials and some specialists outside the government have said that the full extent of Iraq's insurgency and lawlessness would have been difficult or impossible to anticipate when much of the planning for the rebuilding effort took place under the Coalition Provisional Authority in 2003.

The report says that the authority planners "envisioned a much more permissive security environment," but does not take a stand on whether the possibility of such problems should have been considered. The security problems that developed increased the cost of projects and materials, causing delays, the report says.

But security costs alone do not account for the drop in the number of projects that the United States will be able to finish.

"Other unforeseen problems, such as initial plans that were hurriedly put together with little knowledge of actual conditions at proposed projects sites," as well as the need to continue financing the projects once they are up and running, also played a role, the report says. As a result, some $425 million was shifted to support the operation of the plants and the Iraqis who were expected to carry them out.

The report adds that planners were also obliged to take $400 million from the reconstruction money to cover unforeseen administrative costs, probably involving the Western staff members who worked on the effort in heavily guarded hotels and in the fortified green zone in the heart of Baghdad. "The use of these funds has reduced the level of funding that can be provided for specific relief and reconstruction activities in Iraq, and altered U.S. plans," the report says.

The biggest change in priorities in the rebuilding program came when John D. Negroponte, then the American ambassador to Iraq, shifted $3.46 billion from the reconstruction fund to support projects involving the training of Iraqi security forces, building democratic institutions and developing the private sector in fall 2004. But the report notes that month after month, new shifts took place, amounting to $2.12 billion in additional spending changes through October 2005.

No fewer than 185 programs endured changes during that period, the report says. And reconstruction teams were also forced to improvise plans constantly because planners had not taken into account the decayed state of Iraq's infrastructure. As examples, the report cites a port rehabilitation project in Umm Qasr, in the south, where dredging operations were held up as workers shored up crumbling piers and berths for the ships.

The report was released only days after a separate audit of American financial practices in Iraq uncovered irregularities including millions of reconstruction dollars stuffed casually into footlockers and filing cabinets, an American soldier in the Philippines who gambled away cash belonging to Iraq, and three Iraqis who plunged to their deaths in a rebuilt hospital elevator that had been improperly certified as safe.

But in contrast to that earlier audit, which focused on rebuilding projects financed by money from Iraqi oil proceeds and assets seized from Saddam Hussein's regime, the latest report covers projects underwritten with American taxpayer money.

• 174 War & Disaster Profiteers Campaign