Alarm in Congress over race to allocate cash

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US officials are racing to allocate $1.17bn in Iraq reconstruction funds by September 30 to prevent the funds from expiring and being diverted back to the US Treasury.

The “use it or lose it” scenario, which compels US authorities to disperse what remains of the $18.4bn (€14.5bn, £9.6bn) Iraq relief and reconstruction fund by the end of the fiscal year, is ringing alarm bells in some quarters of Congress, where the US-led reconstruction effort has come under scrutiny from Democrats and Republicans alike.

“Never has the phrase ‘haste makes waste’ sounded more ominous. To have [the funds] floating around this way is utterly unacceptable and will undoubtedly lead to wasteful spending, questionable obligations and excessive costs,” Senator Susan Collins, the Republican chair of the homeland security committee, said recently.

Lawmakers’ criticism of the reconstruction effort in Iraq has so far centred on allegations of hundreds of millions of dollars in wasteful spending by US contractors, poor planning by the Bush administration, and the fact that the insurgency has forced the US to divert a substantial chunk of reconstruction funds to pay for security costs.

But there is new evidence to suggest that the US-funded reconstruction of Iraq could soon be hit by further complications, with the expected transition of projects from US control into the hands of the Iraqi government.

In one example recently set out by Stuart Bowen, the special inspector-general in Iraq, a $219m project to create an “advanced first responder network” for emergency services has, in effect, failed, not only because of problems with the underlying infrastructure but because it is unclear whether the Iraqi government will be able to staff and fund the system.

His report found that the emergency network – a project that was contracted to Lucent, the US telecommunications equipment maker, and was transferred to Iraqi government ownership on June 26 – would not operate efficiently because there were not enough trained personnel to staff and operate all the dispatch centres.

Although the project, which was initiated by the Congressional Provisional Authority in 2004 to provide Iraqi police, fire and emergency medical units with a core national public safety communications system, was meant to have nine fully operational dispatch centres, the audit found that, with the “possible exception” of Baghdad, there were not enough trained personnel to staff centres in Kirkuk, Tikrit, Mosul, Basrah and other regions.

Contractors had originally been required to train 710 call-takers and dispatchers to facilitate the network, but just 450 Iraqi nationals were trained. Delays in completing the dispatch centres prompted some of the employees to seek other work. As of June 1, auditors found they were staffed with only nine employees in Tikrit, seven in Mosul and 30 in Baghdad.

According to Mr Bowen’s report, a US official sent a memo to the ministry of the interior last year to seek assurance that the Iraqi government would provide enough funds – about $15.3m – to operate the network until the end of 2006. After being told that the Iraqi government could not support the operation, the required sum was pulled from a separate reconstruction fund.

The botched first responder network is just one of a handful of reconstruction projects that have been audited by Mr Bowen, now on his 13th visit to Iraq. He told Ms Collins early this month he shared her concerns about the $1.17bn contracting spree.

“[We intend] to audit the issue down the road. So I expect that that will serve – I hope it serves – as an appropriate deterrent or motivating factor in ensuring that your worries are not realised,” he said.

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