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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

MELISSA BLOCK, host:

And I'm Melissa Block.

Two reports released today paint a bleak picture of reconstruction in Iraq. One says that Iraq has lost $16 billion in potential oil sales over two years due to insurgent attacks, criminals and bad equipment. The other report says that the construction of the largest police academy in Iraq is so bad, with sewage leaking through the buildings, that the buildings pose both structural and health risks.

Both reports come from the Special Inspector General for Iraq Reconstruction, Stuart Bowen, who joins us in our studios. Welcome.

Mr. STUART BOWEN (Special Inspector General for Iraq Reconstruction): Thank you, Melissa.

BLOCK: Let me ask you first about your report on the oil industry. What is the conclusion you're drawing on the damage to oil facilities and also what's to be done about it?

Mr. BOWEN: Well, first I have to be circumspect about speaking of this audit. This is a sanitized version of a classified audit that I'm much more familiar with, so I don't want to bleed into issues that are classified. So let me simply say that the infrastructure security issue is an enormous one. It's one that my office has highlighted in the course of this year. It underscores the need to protect those critical nodes in Iraq to ensure that their economy will continue to grow.

BLOCK: Let me just follow up on one thing. Is the responsibility for protecting those nodes, as you call them, does that fall to the U.S. military or is that a private contractor issue?

Mr. BOWEN: No, it's primarily now the duty of the Iraqi security forces. There are also facilities protection forces that play a role in certain parts of that. But a previous audit of ours looked at Task Force Shield, which was the first iteration to stand up and train forces that would protect the infrastructure and it fell off the rails. This second phase, as this audit points to, was much more successful.

BLOCK: Let's more onto your report about the police academy in Baghdad. You were there, you've told me, just a week ago.

Mr. BOWEN: That's right.

BLOCK: What did you find?

Mr. BOWEN: Well, it's a huge facility with 50 buildings. I was given a tour by the dean of the academy, a retired police chief. He first brought to my attention concerns about the problems at the academy in a letter to my office. I sent my inspectors out there to look at it and they came back with pictures and a story of very shoddy construction. Really a failure on the part of Parsons, the design build contractor, to get the job done.

BLOCK: Very shoddy construction. I mean, let's be specific here. What you were finding was sewage, raw sewage, running through the building, emptying out of pipes into rooms.

Mr. BOWEN: It was a disaster. You're right, Melissa. The fact is that Parsons subcontracted to an Iraqi contractor who did not have the expertise to get the job done or at least sufficient, or cut corners unacceptably.

And essentially when they put in the plumbing, they had no fittings, so they just joined plumbing pipes, cemented them together and then finished the floor. And the connections burst once they started to be used and the sewage thus leaked from the bathrooms down through the building and into light fixtures and through the ceilings.

BLOCK: And I gather things are so bad in at least one room that the director there calls it the rain forest.

Mr. BOWEN: It's really a very, very difficult situation. The dean of the academy is rightfully upset. He had to close the school for two weeks, send his recruits home. One of his complaints to me was a lot of them didn't come back.

BLOCK: This is especially meaningful, I suppose, because training the Iraqi police force is a hallmark of the whole U.S. plan in Iraq right now and if that's not able to happen, if they're not able to train recruits, they have a huge problem.

Mr. BOWEN: That's exactly right, Melissa, and that's why I'm so concerned about this and why I've pushed to issue a quick reaction report on this in order to get resources quickly to remediate the problems there.

BLOCK: You mentioned that the contract was awarded to the contractor Parsons. How big a contract was it?

Mr. BOWEN: This particular contract was valued at $73 million, but it's going to take a significant amount more to bring it online. There is some warranty work being done now at no charge to the taxpayers, but that's just a start.

BLOCK: And what's the status of that Parsons contract now?

Mr. BOWEN: It has been terminated. Parsons has left the site, but their subcontractor, an Iraqi firm, is taking care of the repairs

BLOCK: Of the projects in Iraq that you've looked at, are there any that you've been able to point to and say good work? This is great.

Mr. BOWEN: Absolutely. Absolutely. Seventy percent of the sites we visited have met contract construction expectations. Eighty percent of the money that we've inspected has gone to projects that are functioning. But obviously there are some disaster stories as well, like the Baghdad Police College. But it shouldn't be taken as emblematic of the overall program by any means.

BLOCK: Stuart Bowen, thanks for coming in.

Mr. BOWEN: Thank you, Melissa.

BLOCK: Stuart Bowen is the Special Inspector General for Iraq Reconstruction. In a statement, Parson said today that they completed their work at the police college this past spring, when it was inspected and accepted by the government. The statement goes on, "our customer noticed Parsons of plumbing problems in July 2006 and we directed the Iraqi subcontractor who performed the original work to correct the problems. The subcontractor currently is changing out the pipes at no cost to the US or Iraqi governments."

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