Mon, May 23, 2005 page7

• Insurgents taking an economic toll in Iraq: US official

  SECURITY PROBLEMS An average of 70 attacks per day on US and Iraqi forces has scared away investors and sharply increased the cost of doing business

  • AP
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  Insurgents targeting oil lines, electricity plants and other infrastructure projects vital to Iraq's reconstruction have delayed US-led rebuilding efforts and raised the cost of doing business in this war-ravaged country, a top US official said.

  Bill Taylor, director of the US-led Iraq Reconstruction Management Office, said Saturday ceaseless attacks on contractors and facilities have also increasing security demands, with up to 16 percent of all project costs now being spent on hiring armed guards, improving site protection and providing equipment like hardened vehicles and telecommunications systems.

  He could not give an overall figure for the extra amount being spent.

  Taylor told reporters that the raging insurgency was scaring away sorely needed foreign investors, even oil companies accustomed to dealing in dangerous locations were staying away.

  "Two years ago I would have liked to have been further, but I would have liked there to have been fewer attacks on people trying to do the reconstruction," Taylor said.

  Disturbing numbers

  Insurgents bent on derailing Iraq's reconstruction are averaging 70 attacks a day, mainly against US and Iraqi forces, the military has said. Some 295 contractors, including security personnel, have been killed until April 30, with most being Americans working on US projects, according to Department of Labor Figures. Others have also been kidnapped.

  Since invading Iraq in 2003, the US has earmarked US$21 billion in resources for the country's reconstruction. So far US$7.5 billion of this has been paid to contractors to perform works. Rebuilding, training and equipping Iraq's own security forces will eat up US$5 billion alone.

  "We are paying more for security than we should, but if the security situation were better we could pay less," he said. "The fact is that security is not good, but nonetheless if we want to move forward in a difficult security environment it costs a little bit more."

  Taylor said despite the insurgency, the US and new Iraqi government were "rapidly" proceeding with reconstruction projects -- including the construction of a water treatment facility in eastern Baghdad's impoverished Sadr City -- electrical plants, schools and clinics across the country.

  "It was slow from July/August, but now it [the reconstruction] is moving very rapidly," he said. "Electricity, water, oil production: there are a range of things we are focussed on."

  Taylor said US$200 million has gone toward Fallujah since the November US military operation to drive terrorists out of the volatile city located just west of Baghdad. Funds there have gone toward a water project, while 19,000 of 33,000 compensation claims have also been paid for damage caused to people's properties because of the operation.

  Frequent complaints

  Earlier this month, a UN-Iraqi survey showed that 85 percent of Iraqis complain of frequent power outages, only 54 percent have access to clean water and almost a quarter of Iraq's children suffer from chronic malnutrition.

  Taylor said with Iraq's blistering summer just around the corner, electricity demands will increase and continue to outstrip supply. He said Iraq needs to attract foreign investors to help rebuild the electricity sector, but that power companies are loathe to do business in Iraq because power costs are so low.

  Before the US-led invasion, Baghdad residents enjoyed about 20 hours of electricity a day. Today, they get about 10, usually broken into two-hour chunks. There are also frequent fuel and drinking water shortages. And only 37 percent of the population has a working sewage system.
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