KBR / Parsons / Willbro steal US$220 Mn. from Iraq Reconstruction Project

The New York Times on Monday this week (24/4/06) had a revealing story about the colossal waste of money in Iraq."Rebuilding of Iraqi Pipeline as Disaster Waiting to Happen" by James Glanz.This is based on the official report which is detailed in the footnotes dated 27/1//06.

When the US forces encircled Bagdhad On April 3, 2003, invading American troops had reached the outskirts of Baghdad and were eyeing its smoking skyline. A naval aircraft dropped a single bomb on the Al Fatah crossing across the River Tigris and smashed one of the bridge spans. This was no ordinary bridge. It carried pipelines that had carried crude oil from the fields around Kirkuk, 60 miles to the the port of Ceyhan. That one free fall bomb probably cost US$ 250, 500 Max. Costs to date and no pipeline repair over US$220 Mn. over 3 years.

The Al Fatah bridge was one of 3 damaged bridges chosen as high priorities in an initial $680 million rebuilding program mandated by Congress. Army Corps engineers estimated that it would cost some $5 million and take less than five months to string the pipelines across the bridge once it was repaired.

Douglas Lee Cox, the northern Iraq project manager for the Army Corps, wrote in a memo on June 9, 2003."There is an urgent and compelling need to accomplish this feat as soon as possible." Then in the fog of war priorities changed and the fforts went elsewhere , and older buried pipelines were able to carry limited amounts of oil, American officials said, but breakdowns were a constant source of concern and loss of oil and therefore revenue - which was (a la Rumsfeld's plan) to pay for the reconstruction. (Ho. Ho.)

To cut a very long, and very complicated story regarding technical problems, ignored engineers reports,evasion, deceit, lies, stupidity, dishonesty, greed short. By April 2004 Ms. Norcross of Kellogg Brown Root (KBR) (part of Halliburton whose Ex Chaiman is of course Veep Cheney) notified a contracting officer in Baghdad that 75 percent of the $220 million allocated for the job order had been exhausted.

Inspectoirs were sent in, engineers,surveyors, pipeline experts, drilling experts, but But it was already too late. One morning American officials in the Oil Ministry in Baghdad finally obtained a status report from KBR.

All the money had been spent.

Not only that but jobs in the US$220 Mn. contract like putting emergency power generators at oil installations, simply hadn't been done.... and what was important, no pipelines were in place.So no oil could move. So no revenue was arriving.The Daily payment charged was US$130,000 per rig and US$99,000 on standby (there were 2 rigs at this rate).report deatils as fotnote - fascinating reading.

But the kicker as in all the best stories is in the tail. The new Al Fatah project is being carried out by a joint venture involving Parsons Corporation and the Australian company Willbros, as sub contractors to KBR.Willbros Group, Inc. is headquartered in Panama City, Panama and has its Administrative offices in Houston, Texas, United States of America.(Co. website)

Parsons Corporation .... regular readers here will remember on the 17th of this Month "Democracy comes at a price ..."

Parsons the company who received roughly $200 million to build 142 health clinics and ran out of money after building 20 in 9 months.

Parsons the company who told their shareholders and the Pasadena Press that ;

In January (2006), Parsons was awarded a $28 million contract to reconstruct and renovate the Tadji military base and Iraqi Armed Forces recruiting stations.

Earlier in January (2006) Parsons Corp. was part of a team (which included - you guessed it KBR) awarded a contract for future work in restoring the oil infrastructure in northern Iraq to pre-war production levels.

The contract, valued at $500,000 to as much as $800 million, covers a variety of services including the cleanup and restoration of oil fields, pipelines and refineries.A 2 year contract with a further 3 one year options.

You couldn't fucking make it up.

Last week Parsons announced a merger / take over ..3D/International (Houston based privately held company)is a program management, condition assessment, design, construction and information technology company. Founded in 1953 and headquartered in Houston, 3D/I has 485 employees in fourteen U.S. offices. They specialize in education public building and defense facilities; providing services on significant projects like the Pentagon, the Los Angeles Unified School District construction program, multiple federal courthouses and state capitols and more than 160 community college campuses throughout the U.S.The deal will be finalised on May 12th.

Interestingly 3D/I we have served as program manager for the Pentagon renovation since 1992 including the re-construction effort after the 9/11 attack.

They also say on their website ...

We understand the unique needs and requirements of the Department of Defense, and we know what it takes to deliver a quality product on schedule and within budget.

Report on the Special Assessment of the Pipeline Crossing, Al Fatah Iraq (Rpt No SIGIR-SA-05-001) January 27th 2006.Timothy P Baum

A Dummy's guide to ripping off the Iraqi reconstruction Project.