Thread: Archive Latest News - Think Tank - 15/04/08 - 26/08/08

Audit finds millions wasted in Iraq reconstruction contract

Millions of dollars were likely wasted on a 900 million dollar army contract to build courthouses, prisons, police and other security facilities in Iraq, an audit to be released Monday has found.

The audit by the congressionally appointed Special Inspector General for Iraq, Stuart Bowen, found that the contractor, Parsons Delaware Inc., completed only about a third of 53 planned construction projects.

"Although the failure to complete some of the work is understandable because of its complex nature and the unstable security environment in Iraq, millions of dollars in waste are likely associated with incomplete, terminated and abandoned projects under this contract," the audit report said.

The contract was one of a dozen design-build construction contracts awarded by the army in 2004 to restore Iraq's infrastructure in broad areas such as security and justice, water, oil, electricity and transportation.

Parsons was supposed to build police and civil defense training areas, two prisons, two courthouses, fire stations, and border control facilities.

The report said more than 142 million dollars, or nearly 43 percent of the funds disbursed so far, "were spent on projects that were either terminated or cancelled, although a number of the projects were subsequently completed."

Repeated construction delays prompted the government to cancel the construction of two partially built prisons, one at An Nasariyah and the other at Kahn Bani Sa'ad, the audit said.

The An Nasiriyah prison was later completed by another contractor, but the facility at Kahn Bani Sa'ad was turned over half finished to the Iraqi government which has no plans to use it, the audit said.

It said about 40 million dollars has been spent on the Kahn Bani Sa'ad prison.

"At this point the entire amount disbursed for this project may ultimately be wasted because the government of Iraq currently has no plans for completing or using this facility," the audit said.
The audit said there were "significant weaknesses" in the government's oversight of the contract, which created "an environment that was conducive to waste and inefficiency."

Audit finds millions wasted in Iraq reconstruction contract - Middle East News

Iraq Provincial elections to be delayed

Political rows and time factor are increasing pressure on the Parliament which starts recess early August which brings the provincial election law to further delay if it is not approved within days.

First deputy speaker Sheikh Khaled Attieh considered that revoking the law by the presidency council will hold off elections this year holding Speaker Mahmoud Al Mashhadani the responsibility for the failure to reach a compromising law given that insisting on carrying out a secret ballot has complicated the issue.

Kurdistan Alliance MP Mahmoud Othman expected the issue of provincial law to be delayed till the next legislative quarter which means adjourning elections till next year. Othman noted that contacts are ongoing between the Alliance and other parliamentarian parties.

Iraq Provincial elections to be delayed | Iraq News | Alsumaria Iraqi Satellite TV Network

Criticism of government measures to combat financial and administrative corruption and Minister of Planning exclude reduce corruption

criticized members of the Chamber of Deputies in particular talks about the "Radio Sawa" the government's measures in combating financial and administrative corruption, which affects negatively to attract foreign investment in the country. As a member of the Economic Commission confirmed in the House of Representatives, Ahmed Alwan that corruption was rampant in most joints official institutions hindering the flow of foreign investments to the country.

He said: Many companies would have liked to invest in Iraq, but behind the scenes deals made certain companies without the other, for a commission take another. Supposedly, Messrs. officials from the prime minister, ministers and ****utive agencies to work with transparency and impartiality without considering the narrow partisan interests. "

The deputy, Mahmoud Othman, the Kurdish Alliance to the absence of practical steps in combating financial and administrative corruption, saying: administrative corruption exists in Iraq is unclear, but practical steps to combat weak. For example, the minister and his party of corruption involved participant in the government are tolerated. "

For his part, dismissed the Minister of Planning and Development Cooperation on two doors possibility of reducing corruption in the security chaos and political as saying, adding:

"When the improved security situation improves state authority and control, reducing the instances of corruption, we can not control in light of lawlessness and political."

This is called the Integrity Commission in the Chamber of Deputies interrogate ministers to parliament to get acquainted with the fact that there are cases of financial and administrative corruption in their ministries.

Translated version of http://www.aljeeran.net/economic.html

Talabani: resolution of veto against the law of the provincial assemblies have been taken to protect the Constitution and the constants

Iraqi president Jalal Talabani, today, Monday, evening, that "the decision to set aside the law of provincial council elections had been taken to protect the Constitution and the Iraqi national constants," pointing out that "the Federal Court overturned the law also neglect the rights of women."

This came in a statement received by the Presidency of the Republic "Uzmatik" a copy of it.

The Iraqi parliament voted last Tuesday, the approval of the provincial council elections law at the meeting raised a lot of controversy between the parliamentary blocs, because adoption of public and secret vote for certain paragraphs of the law, which led to the withdrawal of the Kurdistan Alliance bloc of the meeting in protest against the method of voting.

The law was to overturn a presidential time, the veto came as a member of the House of Representatives from the United Iraqi Alliance list Hassan Al-Sunaid on problematic voting on the law, and failure to ensure the participation rate of women, and also because the reservation bill was submitted by the Vice Chairman of the House of Representatives and was accompanied with a copy sent by the law To the presidency.

The statement said that "President Jalal Talabani met today with President of Kurdistan region Massoud Barzani, the President of the Supreme Islamic Iraqi Alliance list, Mr. President Abdel-Aziz al-Hakim.

The statement added that "the trilateral meeting held at the residence of Prime Alliance list, Mr. Abdul Aziz al-Hakim was the exchange of views on the latest developments in the Iraqi arena, stressing identical views."

The statement pointed out that "Talabani stressed the need to hold continuous meetings between political blocs players to find ways to resolve all disputes, including the outstanding issues between the Federal Government and the Kurdistan Regional Government, particularly the presence of members of the political offices of the Patriotic Union of Kurdistan and the Kurdistan Democratic Party in Baghdad."

The head of the Kurdistan region Massoud Barzani arrived in Baghdad last Thursday to discuss the most important outstanding issues between the territorial Government and the Government Law Center, such as provincial council elections and the issue of Kirkuk, the oil and gas law, constitutional amendments and the relationship between the province and the central government.

Translated version of http://iraqalaan.com/

Divergence in the positions of deputies from the presidential veto on the Law of provincial council elections

Deputies from the varied positions of the presidential veto on the Law of provincial council elections and returned to the House of Representatives to amend it so as to ensure compatibility and vote again.

It was deputy Accord Front Azzedine state his belief that there political motives behind the process of veto and said in a statement for "Radio Sawa":

"Veto is a political nature, and our vote on the law was not a violation of the constitution."

Meanwhile, Lebanese MP from the Kurdistan Alliance Rawanduz p.i.o.n.eering the use of the Presidency constitutional right to veto the law:

"The Presidency of the Republic used its right to veto the law in accordance with Article 138 of the Constitution, and the binding commitment to ensuring the constitution."

Commenting on the report by the Attorney Rawanduz representative said the Arabs of Kirkuk in Parliament Omar al-Juburi:

"Political motives are not related to legal and procedural and legal vetoes, the Iraqi Constitution in Article 138 obligates the Presidency upon re-laws to the House of Representatives to identify options for materials required irrefutable."

He favored the deputy, the United Iraqi Alliance Redha Jawad Taqi possible adoption of deals to achieve the state of harmony and resolve the dispute over the law:

"Disagreements over the political and electoral law can be solved by leaders of the bloc transactions or the adoption of a settlement with the commitment to the principle of consensus."

That pointed to a parliamentary circles widen the difference between the parliamentary blocs about what has been in the law regarding Kirkuk provincial council elections.

Translated version of http://www.radiosawa.com/arabic_news.aspx?id=1649464

Two Emiraties carry a giant project to produce gas in the Kurdistan region of Iraq

Work is being completed for a huge project in the city of Sulaymaniyah for the production of gas by the Iranian "Dana Gas" and "Crescent Petroleum" for UAE, is scheduled to be completed first phase of the project and gas extraction in the month of August next.

Regarding the project told of the "Radio Sawa" Director of the company Dana Gas in the Kurdistan region Shaker Wajid saying: "Dana Gas Company and Crescent Petroleum Company is one of the giant strategic projects currently under construction in Kurdistan, in the light of this project will be the company Dana Gas extraction dry gas from the field (Port Corps) and connects with 180 km gas pipeline, linking the electricity stations."

In terms of cost of the project and added production capacity and find:

"Dana Gas Company has allocated 650 million dollars in the first phase, which is also building two gas which produce gas liquid (the PJ) production capacity in the final stages to 1000 metric tons per day."

It is expected that the project contributes to the solution of the electrical energy crisis worsening in the Kurdistan region.

Translated version of http://www.hewarat.dk/hewarat_data.php?sid=8620

Parliament Kordestani: pass the election law after the end of the legislative and Article 24 tense situation seriously

A member of the House of Representatives deputy Iraqi Kurdistan Alliance Sirwan Al-Zahawi about the existence of a proposal to hold a special meeting of the Iraqi parliament after the end of the current legislative "to approve the election law in the event of failure to reach compromise solutions on the law during the next two days."

The Chairman of the Committee on Territories in the Iraqi parliament Hashim Al-Taee has told "Uzmatik" today, Monday, that "the differences between the political blocs around the organization of elections in the city of Kirkuk has become very big, and there is no hope to reach a solution on this issue during the short time remaining for the completion of the next chapter Legislative current Iraqi parliament. "

He explained in an interview with Al-Zahawi "Uzmatik" today, Monday, that "the twenty-sixth article of the rules of procedure of the Iraqi parliament gives the right of the Iraqi president or head of parliament or parliament fifty Vice invitation to hold a special meeting even during the official holiday."

He added that Al-Zahawi "Article 26 also stipulates countless special meeting entitled to a specific topic to be discussed, which means the possibility of passing the election law after the end of the current legislative, which falls on next Wednesday," as he put it.

He called Al-Zahawi "the abolition of the Committee set up by the presidency of the Iraqi parliament to consider reversing the Presidency on the Iraqi election law, because they failed to find any solution to the disagreements on article 24 of the Act relating to the city of Kirkuk, as well as the absence of a clear mechanism of the Commission's work, as a guarantee The goals have been achieved. "

Attorney for the Kurdistan Alliance called on the political blocs to "find a quick on the electoral law, particularly the issue of organizing elections in the city of Kirkuk on a consensual basis satisfy all components of the city."

Al-Zahawi, warned that "delay the adoption of the electoral law and the insistence of some parties to the survival of Article 24 of the Electoral Act currently drafted, would lead to tense security situation in the country seriously," according to the recipe.

It is noteworthy that the Iraqi parliament voted last Tuesday, the approval of the provincial council elections law which set aside the presidency later in the meeting raised a lot of controversy between the parliamentary blocs, because adoption of public and secret vote for certain paragraphs of the law, which led to the withdrawal from the Kurdistan Alliance bloc meeting In protest against the method of voting.

The paragraph 24 of the Law on Election of provincial assemblies, which discussed the situation in the governorate of Kirkuk, the postponement of elections in the province for six months, with the need to be making in the governorate of Kirkuk through a period of postponement by mutual agreement between the three main components "Arabs - a response - Turkmen", to be Authority is divided among them by 32% in each component gives the proportion of 4% for Christians, as well as the transfer of the security file in the city to military units from around the southern and central Iraq, rather than military units currently operating

Translated version of http://iraqalaan.com/bm/Politics/-24--7.shtml

Meddling in Iraq's oil contracts

Reports that a number of international oil companies are on the brink of signing contracts with Iraq have prompted a furious reaction in certain parts of the media and on Capitol Hill. The deals have been widely characterised as no-bid contracts, implying that Big Oil has somehow used its political clout to muscle in on Iraq and renewing suspicion that the whole US intervention in Iraq was primarily a grab for natural resources. In the Senate, senior Democrats have argued that the contracts would heighten Iraq's sectarian tensions, and those lawmakers are threatening to cut financing for some nonmilitary programmes in Iraq if the deals go ahead without prior passage of new hydrocarbons legislation.

These are gross mischaracterisations of the Iraqi contracts.

If the Iraq invasion was about oil, let the record show that that mission has been botched even worse than the war's toughest critics claim the military expedition has been. Iraqi oil production steeply declined after the conflict began, and only this year has it returned to the levels of the Saddam Hussain era. This recovery can partly be put down to better security, especially along the northern export pipeline. But international oil companies also deserve some credit.

More than 40 foreign oil firms - ranging from the largest Western giants to minnows - have signed memorandums of understanding with the Iraqi Oil Ministry over the past four years. The companies have provided millions of dollars worth of advice, field studies, training programmes and, in some cases, guidance on procurement and reservoir management to an increasingly beleaguered ministry, all free of charge. None of the companies kept secret its hope that this help would position it well for the future, but the assistance has been vital to restoring Iraq's oil production, especially at the country's biggest-producing fields.

Last year the Iraqi Oil Ministry found itself in a bind. It realised that this one-way relationship could not go on forever, but with political disputes hampering passage of a hydrocarbons law and foreign investment, it needed to extend the remote assistance programme. So last autumn, ministry officials reached out directly to nine companies - not all super-majors by any means - in a bid to formalise the relationships through a two-year bridging mechanism known as a technical support agreement. The goal was to contract with the companies to support the ministry's procurement, project management and field management tasks to increase production sustainably. None of the nine companies will operate on the ground, and all have one thing in common: They have in the past provided valuable help in managing the oil fields that Iraq counts on most.

Not a cakewalk

Although the companies were sought out by the Iraqis, the past 10 months of talks have not been a cakewalk for the firms. Iraqi oil officials have proved to be tough and unyielding negotiators, seeking the best bargains for their country. Terms have not been made public, but the returns for the companies are thought to be low and the production targets challenging. Perhaps most significant, the companies have been told that the support agreements will not guarantee them preferential access to these or any other fields when Iraq eventually goes ahead with open bidding, which the Oil Ministry hopes will take place early next year.

To block the support agreements at this stage would be a major disservice to Iraq. Such action would deny Iraq's oil industry much-needed help from the companies with which Baghdad most wants to work. It would also rob the country of revenue that could improve its financial strength and ease the burden on US taxpayers.

Senate critics are also doing a disservice to US interests: Obstructing the deals simultaneously conveys to Iraqis the image of direct US interference in their sovereign affairs and the impression that America is somehow seeking to impede their country's recovery. The senators no doubt mean well, but it is difficult to see how their actions serve the long-term interests of Iraq or the United States.

-Los Angeles Times-Washington Post News Service

Raad Alkadiri is a senior director at PFC Energy in Washington, where he heads the Iraqi Advisory Service, which advises oil and gas companies - including some of the nine mentioned in this column - on investment risk in Iraq. PFC Energy does not have a direct commercial stake in the Iraqi market.

Gulfnews: Meddling in Iraq's oil contracts

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Baghdad Stock Market seeks to open branches in Governorates

The ****utive Director of the Iraq market for securities Taha Abdul Salam, announced that the improvement of security experience in Iraq during the first half of this year, contributed significantly to the revitalization of the Iraqi Stock Exchange.

He stated to «Al Sabah », the number of shares traded amounted to 94 billion, compared with 27 billion for the same period of last year, an increase of 248 percent and increased the number of sessions from 50 to 67. The value of transactions increased 354 percent, rising from 46 billion to 209 billion dinars (about 180 million dollars), as the market index rose from 34 to 38 points.

Abdul Salam expressed his confidence that online trading to be adopted during the very short period of time, will greatly enhance the performance of the stock market, which will enhance investment opportunities. He said: The Stock Exchange seeks to open branches in the governorates, the first will be in Babil province.

Baghdad Stock Market seeks to open branches in Governorates | Iraq Updates

SPECIAL REPORT: What Do High Oil Prices Mean for Iraq's Future?

There are very few silver linings to current record-high oil prices — but a more stable future for embattled Iraq may be one of them. Many experts believe that the country's growing oil revenues will yield three benefits: an improving economy that can diminish some support for the insurgency, more money to develop Iraq's security forces, and a greater willingness by other countries to invest in Iraq's future.

The U.S.'s Energy Information Administration projects that crude oil prices will average about $127 a barrel in 2008 and $133 in 2009, up from the $72 average in 2007. With the world's third largest proven reserves, and production having finally returned to 2.5 million barrels per day, Iraq's revenues will surely be greater than in past years. Iraq is expected to draw $70 billion in oil revenue this year alone, and its government has announced plans to further increase oil production.

This brings us to the first benefit that analysts foresee: a growing Iraqi economy.

One of the first things Iraq will need to do is upgrade its equipment used for oil production. Much of this infrastructure is antiquated, and there have been over 450 attacks on Iraq's pipelines, oil installations, and oil personnel since the insurgency began.

Michael Makovsky, foreign policy director at the Bipartisan Policy Center and former special assistant for Iraqi energy policy in the Office of the Secretary of Defense, told me that the funding needs of Iraq's oil infrastructure are tremendous.

"Some can come from foreign investors," he said, "but Iraq will have to put in a lot of money."

There are also multiple spending needs inside the country — including building power plants, meeting Iraqis' healthcare needs, and undertaking a housing reconstruction project for displaced people.

Iraqi government spokesman Ali al-Dabbagh recently told Iraqi media outlet Buratha News that "next year's budget will focus on economy, investment and services [while] the focus was security in previous phases."

A large federal budget means that funds should now be available to address Iraq's little-mentioned healthcare crisis; currently each Iraqi receives an average of only $68 a year in medical services. It also means, as reported by Iraq's Radio Sawa, that the government-sponsored food coupon program will receive additional support through a recent $21 billion supplementary federal budget.

Iraq's federal government will also be able to expand provincial budgets. According to Iraq's Al-Sabah newspaper, the government's 2009 budget apportions $13.6 billion to provincial ministries — which will likely increase the national government's influence at a regional level.

The combination of expanded social programs and a generally improving Iraqi economy will signal to citizens that the country's future is not destitute.

Iraqis, shaken by years of violence, may have a reason to participate in the reconstruction process; improving conditions may diminish both direct and also "soft" support for the insurgency as citizens economically invested in Iraq's future.

Danielle Pletka, the American Enterprise Institute's vice president of foreign and defense policy studies, said, "The problem we had in Iraq related to the space in which a relatively few extremists could operate, tolerated by locals. They will no longer be tolerated if the locals are employed and invested in Iraq's success."

Some observers hope that a growing Iraqi economy may even diminish Iran's influence. A senior American military intelligence officer expressed hopes that this new oil wealth could help incumbent Shias fund their campaigns in the next round of elections, and thus reduce Iran's financial hold over them.

He argues that one reason the Islamic Supreme Council of Iraq (formerly the Supreme Council for Islamic Revolution in Iraq) was able to break with Iran was that the group began to run a budgetary surplus, and could thus provide for its own funding needs.

The second benefit that many analysts see for Iraq from high oil prices is the government's ability to invest in the security forces.

Bill Roggio, a civilian military affairs analyst and my colleague at the Foundation for Defense of Democracies, told me that the security forces want to upgrade.

"The Iraqi army is currently a motorized infantry force," he said. "It appears that the ministry of defense is looking to transform several motorized divisions into mechanized and armored divisions. This can cost billions per division, but now the Iraqi government will have the money to purchase the equipment."

Michael O'Hanlon, a senior fellow at the Brookings Institution, told me that as increased oil revenues allow Iraq's government to spend more on its military, "it might help deflect the U.S. political pressure that Iraq isn't spending enough money on its security forces."

The third benefit is that other countries will be more likely to help ensure Iraq's continued stability.

Perhaps this can be glimpsed in Kuwait recently naming its first ambassador to Iraq since the 1991 Gulf War, and in Norway, Bahrain, and the United Arab Emirates considering reopening their embassies in Iraq.

The intelligence source quoted above said, "This is likely due to a combination of oil prices and the improving security situation in Iraq."

Makovsky said, "In a world where more oil is needed on the market, Iraq has the potential to be one of the largest producers in the world."

As Iraq's oil production capacity increases through infrastructure investments, Iraq may earn not only a better seat in the global oil market, but also at the diplomatic table.

However, the road paved with oil is slippery. One reason improvements should not be seen as inevitable is the possible return of heavy insurgent violence, while another factor is the political situation and the government's ability to effectively spend its newfound wealth.

Marina Ottoway, director of the Middle East program at the Carnegie Endowment for International Peace, told me: "They key is the security situation, which is in turn tied to the political situation."

Pointing out that there is currently a debate about how successfully Iraq's government is spending its budget, Ottoway said, "Greater revenue will not make a difference unless the government is organized well enough to spend it."

Iraq may also face challenges specifically related to its increased oil wealth, as greater amounts of money pouring into the country will have an inflationary effect. Lowering interest rates may help Iraq cope with the rising costs of consumer goods, but only for so long. The government must develop a long-term strategy for stabilizing the economy.

But despite these uncertainties, high oil prices seem to be a significant boon for Iraq. They will provide the country with unprecedented economic leverage that can in turn enhance stability.

SPECIAL REPORT: What Do High Oil Prices Mean for Iraq's Future? - Middle East Times