On April 17 the US Agency for International Development (USAID) awarded a contract worth $680 million to Bechtel Corp., a private company with close ties to the Republican Party and the Bush administration.
The outcome of a secretive bidding process open only to a select group of American corporations, the contract is the latest and largest in a series of windfalls for corporate America following the overthrow of the Saddam Hussein regime.
The areas covered by the contract include the rehabilitation of Iraq’s power, water and sewage systems that were destroyed in the bombing campaign, rehabilitation of airports, and the dredging of the Umm Qasr port. Bechtel’s future work in the country will also likely include repair and reconstruction of hospitals, schools, government buildings and irrigation and transportation systems.
Bechtel stands to gain much more than the initial contract. USAID officials have indicated that the final price tag will run into the tens of billions of dollars. Much of this work—which includes operations in nearly every important area of the country’s infrastructure—will go to Bechtel and its subcontractors. “This has never been done before—an American corporation rebuilding an entire foreign country,” noted Daniel Brian, Executive director of Project of Government Oversight, which is based in Washington DC.
Previous contracts included a multi-billion dollar deal secured by Halliburton, a company previously headed by Vice President Dick Cheney. The cost-plus-profit contract was awarded without competition to Halliburton’s subsidiary, Brown & Root, which was also one of the six original contenders for the contract awarded to Bechtel. Brown & Root eventually opted out of the bidding process after charges of favoritism were raised. Cheney still receives up to $1 million a year from Halliburton as part of his severance package.
Other American corporations that have won contracts include Research Triangle Institute, which will receive up to $167 million for work in local governance services, and Creative Associates International, which won a $62.2 million contract to rebuild Iraq’s devastated educational system.
All of these costs will initially be paid by American taxpayers, who will also pay for the bombs used to destroy Iraqi infrastructure in the first place. The rest of the burden will fall on the Iraqi people, as the US loots the country’s oil resources to pay off the huge corporate contracts.