Sunday, April 02, 2006

A reconstruction contract for the building of 142 primary health centers across Iraq has run out of money, after two years and roughly $200 million, with no more than 20 clinics now expected to be completed, the U.S. Army Corps of Engineers says.

The contract, awarded to U.S. construction giant Parsons Inc. in the flush, early days of reconstruction in Iraq, was expected to lay the foundation of a modern health-care system for the country, putting quality medical care within reach of all Iraqis.

Parsons, according to the Corps, will walk away from more than 120 clinics that on average are two-thirds finished. Auditors say its failure serves as a warning for other U.S. reconstruction efforts due to be completed this year.

Brig. Gen. William McCoy, the Army Corps commander overseeing reconstruction in Iraq, said he still hoped to complete all 142 clinics as promised and was seeking emergency funds from the U.S. military and foreign donors. "I'm fairly confident," McCoy said.

Coming with little public warning, the 86 percent shortfall of completions dismayed the World Health Organization's representative for Iraq. "That's not good. That's shocking," Naeema al-Gasseer said by telephone from Cairo. "We're not sending the right message here. That's affecting people's expectations and people's trust, I must say."

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In January, Bowen's office calculated the American reconstruction effort would be able to finish only 300 of 425 promised electricity projects and 49 of 136 water and sanitation projects.

U.S. authorities say they made a special effort to preserve the more than $700 million of work for Iraq's health-care system, which had fallen into decay after two decades of war and international sanctions.

Doctors in Baghdad's hospitals still cite dirty water as one of the major killers of infants. The city's hospitals place medically troubled newborns two to an incubator, when incubators work at all.

Early in the occupation, U.S. officials mapped out the construction of 300 primary-care clinics, said Gasseer, the WHO official. In addition to spreading basic health care beyond the major cities into small towns, the clinics were meant to provide training for Iraq's medical professionals. "Overall, they were considered vital," she said.

"Security degenerated from the beginning. The expectations on the part of Parsons and the U.S. government was we would have a very benign construction environment, like building a clinic in Falls Church," said Earnest Robbins, senior vice president for the international division of Parsons in Fairfax, Va. Difficulty choosing sites for the clinics also delayed work, Robbins said.

Faced with a growing insurgency, U.S. authorities in 2004 took funding away from many projects to put it into building up Iraqi security forces.

"During that period, very little actual project work, dirt-turning, was being done," Bowen said. At the same time, "we were paying large overhead for contractors to remain in-country." Overhead has consumed 40 percent to 50 percent of the clinic project's budget, McCoy said.

In 2005, plans were scaled back to build 142 primary clinics by December of that year, an extended deadline. By December, however, only four had been completed, reconstruction officials said. Two more were finished weeks later. With the money almost gone, the Corps of Engineers and Parsons reached what both sides described as a negotiated settlement under which Parsons would try to finish 14 more clinics by early April and then leave the project.

The agreement stipulated that the contract was terminated by consensus, not for cause, the Corps and Parsons said.

Both said the Corps had wanted to cancel the contract outright, and McCoy rejected the reasons that Parsons put forward for the slow progress.

"In the time they completed 45 projects, I completed 500 projects," he said. Parsons has a number of other contracts in Baghdad, from oil-facility upgrades to border forts to prisons. "The fact is it is hard, but there are companies over here that are doing it."

Bowen called the outcome "a worst-case scenario. I think it's an anomaly." He said, however, that U.S. reconstruction overseers overwhelmingly have neglected to keep running track of the remaining costs of each project, leaving it unclear until the end whether the costs are equal to the budget.

"I can't say this isn't going to happen again, because we really haven't gotten a grasp" of the cost of finishing the many pending projects, Bowen said.