Bechtel Gets $680 million Iraq Infrastructure Contract
Former Secretary of State
George Shultz, a proponent of the war in Iraq and a member of the Bechtel
board, denied using his political connections to win work for Bechtel and
pointed to the company's long history.
By Tim
Dobbyn: 04/17/03
WASHINGTON (Reuters) - A contract worth up to $680 million to repair war-torn
Iraq's electricity system, water supplies and other key infrastructure has gone
to Bechtel Group Inc., the U.S. Agency for International Development said on
Thursday.
Worth $34.6
million initially but expected to include repair of airports, ports and
possibly work on hospitals, schools, other government buildings and irrigation
systems, the contract is the biggest awarded by USAID so far in its initial
batch of Iraq projects.
"Restoration
of the country's key infrastructure is a priority of the U.S. government's
effort to strengthen Iraq's economy and ensure delivery of essential public
services to the Iraqi population," USAID said in a statement.
Bechtel, a
privately held engineering, construction and technical services company, beat
out rival Fluor Corp., also based in California.
The
105-year-old Bechtel helped build the Hoover Dam in the 1930s and 50 years
later completed work on the Channel Tunnel linking England and France.
Foreign
companies have complained that they cannot be prime contractors under USAID's
Iraq program, although the agency has repeatedly said non-U.S. firms can be
subcontractors.
"It is
anticipated that Bechtel will work through subcontractors on a number of these
tasks after identifying specific needs," USAID said Thursday in a
statement, adding that Bechtel would also employ local people.
Some lawmakers
have complained about the U.S. government's decision to award no-bid contracts
in certain cases, as well as the closed-door nature of the process.
Former
Secretary of State George Shultz, a proponent of the war in Iraq and a member
of the Bechtel board, denied using his political connections to win work for
Bechtel and pointed to the company's long history.
"Over the
100-year period there have Republicans in office and Democrats," Shultz
told Reuters.
Bechtel would
identify what needs to be done and let others bid on parts of the work, Shultz
said. "Bechtel may do some of it itself, but undoubtedly most will be
subcontracted out to others," he said.
USAID has
already awarded smaller contracts to run Iraq's Umm Qasr port, restock schools,
bolster local government and assist the aid agency in its Iraq planning effort.
Still pending
are contracts to manage air shipments of aid, run warehouses, restore the
public health service and promote citizen participation in impoverished Iraqi
communities.
The true cost
of rebuilding Iraq is still being calculated, but most experts expect it will
run to tens of billions of dollars.
The award of
the lucrative infrastructure contract had been expected for weeks but had
become hung up over whether extra insurance could be extended to contractors
working in areas where weapons might be disturbed.
President
Bushon Thursday authorized USAID to protect Bechtel from having to pay damages
or claims that result from incidents involving chemical, biological,
radiological or nuclear weapons, land or sea mines, or other explosive devices
or unexploded ordnance.
Fluor said it
was disappointed it was outbid on the infrastructure contract but expected to
get work in other areas where it had expertise, such as restoring Iraq's oil
and gas industry.
"It's safe
to say that what you're seeing in dollar amounts to date is just the
beginning," said Fluor spokesman Jerry Holloway.
(Additional
reporting by Andrea Orr and Adam Tanner in San Francisco)