Security Costs Drain Iraq Rebuilding Projects

President Bush cites problems and progress in efforts to rebuild Iraq. But a new General Accounting Office report counters more optimistic views, and contractors say that 25 percent of what they spend in Iraq goes to security.

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RENEE MONTAGNE, host:

In a speech Wednesday, President Bush acknowledged problems with reconstruction in Iraq. But he insisted that the effort is making progress. Democrats have responded with a report that paints a far dimmer picture. NPR's Corey Flintoff has more.

COREY FLINTOFF reporting:

As part of his campaign to bolster public support for his Iraq policies, President Bush described what he said is steady progress in the Iraqi cities of Najaf and Mosul. At the same time, he conceded that reconstruction has not gone as well as the administration hoped.

President GEORGE W. BUSH: Rebuilding a nation devastated by a dictator is a large undertaking. It's even harder when terrorists are trying to blow up that which the Iraqis are trying to build.

FLINTOFF: Democrats reacted by issuing their own status report on reconstruction in Iraq, asking what's been done with the nearly $30 billion that Congress appropriated for the job. Senator John Reed, a Rhode Island Democrat, charged that billions of dollars may have been lost to waste, fraud and abuse.

Senator JOHN REED (Democrat, Rhode Island): Furthermore, General Accounting Office has reported that many of the reconstruction projects already completed have fallen flat. The GAO documented that US-funded water and sanitation projects, representing one-quarter of the work, were inoperable or were operating at lower-than-normal capacity.

FLINTOFF: The Democrats' report echoed one issued in October by the special inspector general for Iraq reconstruction which said that about 25 percent of the cost of reconstruction projects in Iraq is spent on security. Hamin Dezeyi(ph) is an Iraqi-American whose company, Sigma Construction, has rebuilt government buildings in Baghdad and helped to fortify US and Iraqi bases with concrete barriers. Dezeyi says he factors in a cost of three security guards to protect each civilian worker on his team.

Mr. HAMIN DEZEYI (Sigma Construction): To protect your people when they are moving from site to site, you need security people with them in order to avoid them to be kidnapped.

FLINTOFF: Hamin Dezeyi says one way to reduce security costs is to hire Iraqi workers who will attract local support for the project.

Mr. DEZEYI: When you hire more Iraqis, you're going to create more jobs, and by creating more jobs, you're gonna link more people in the society with your company, and they're going to defend you more.

FLINTOFF: President Bush did speak of shifting the focus to smaller projects whose benefits are more visible to ordinary Iraqis. But many large infrastructure projects remain, such as restoring the country's electrical grid. The inspector general's report said there's a danger that some of those projects might not be completed if the money allocated for them is eaten up by the cost of security. Representative Christopher Shays chairs the House subcommittee that oversees Iraqi reconstruction. The Connecticut Republican says that if the US wants Iraq to succeed, it's going to take more money.

Representative CHRISTOPHER SHAYS (Republican, Connecticut): If we're going to say, you know, `We need to get out and politically we can't deal with the cost, we could not fund some of those projects in Iraq; we'll muddle through,' it will make their government less stable, and it would give the insurgents more to complain about and to make an issue. So we can do it either way. The best way is to make sure that the projects we've begun have--are concluded.

FLINTOFF: The Democrats' latest report points out that two sources of funding the Bush administration was counting on haven't come through to any great extent. Iraq's oil production remains below prewar levels, and international donors have so far delivered less than a quarter of the more than $13 billion they pledged at a conference in Madrid two years ago. Corey Flintoff, NPR News, Washington.

MONTAGNE: You're listening to MORNING EDITION from NPR News.

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