U.S. lacks money to rebuild Iraq

WASHINGTON — The Bush administration cannot fulfill all its promises to rebuild Iraq because soaring security costs, mismanagement and poor planning have cost billions of dollars, federal auditors said yesterday.

Some projects — including those to provide clean water for Iraqis — have been canceled as a result.

In one case, security costs for a U.S. Agency for International Development program on economic reform increased from $894,000 to $37 million, an auditor told Congress. And hundreds of millions of dollars are being diverted to pay for training for Iraqis and for the maintenance of new facilities, expenses overlooked in the initial U.S. planning for reconstruction, auditors said.

Add to that the rising prices for materials, cost overruns and delays, and there's far less money to rebuild Iraq than the Bush administration envisioned, said Stuart Bowen Jr., special inspector general for Iraq reconstruction. He called the shortfall "the reconstruction gap."

"Though the causes may be numerous and valid, the existence of the gap simply means that the completion of the U.S.-funded portion of Iraq's reconstruction will leave many planned projects on the drawing board," Bowen told the House Subcommittee on National Security, Emerging Threats and International Relations.

Bowen said he'd know how big the reconstruction gap is in two weeks.

A 2003 World Bank estimate said it would cost $56 billion to rebuild Iraq's aging and war-damaged infrastructure, while the U.S. government committed to spend $29 billion, Bowen said. But he added that the estimate didn't take into account rising security costs or "losses from mismanagement, corruption and general inefficiency."

The Bush administration expected Iraqi oil revenues to help foot the bill. Instead, Iraq is spending $300 million a month to import refined gasoline because it doesn't have enough refineries, Bowen said. One potential pot of money — the $30 billion United Nations Iraqi oil-for-food program — is about $8 billion short because of thievery and poor record-keeping, he said.

Fixing Iraq's oil infrastructure will cost $30 billion more than originally thought, said Joseph Christoff, the director of international affairs for the Government Accountability Office (GAO), the investigative arm of Congress.

Security costs continue to be a major problem.

In July 2005, 34 percent of reconstruction spending went to pay for security, up from 23 percent a year earlier, Christoff said. Two power-generation programs — worth about $15 million — were cut, and sewer repairs in central Iraq were stopped for four months because of security-cost overruns, according to the GAO.

The U.S. government has scaled back spending to provide clean water from $4 billion to $1.2 billion, Bowen said. Three of the four major clean-water projects were canceled.

The Bush administration also didn't plan or budget money for maintenance or for training Iraqis on the new high-tech equipment the United States bought, Bowen and Christoff said.

In June, more than a quarter of the large new sanitation projects — worth $52 million — weren't working because of a lack of training and maintenance, Christoff said.

More than $350 million has been diverted from reconstruction to maintenance, and that's merely a start, Bowen said.

"What we hand over has to endure for democracy to endure," Bowen said.

In a related development, members of Congress from both parties blasted the Department of Defense's acting inspector general, Thomas Gimble, because his agency quietly pulled all its auditors and criminal investigators out of Iraq a year ago.

Gimble said much of the work is done in Washington and by other agencies, including Bowen's office and the GAO.