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Home > Business > Business Headline > Report

US may stop funding Iraq reconstruction

January 03, 2006 17:03 IST

US President George Bush seems to have gone soft on his earlier view of rebuilding war-ravaged Iraq. According to the Washington Post, the Bush Administration will not seek further Iraq reconstruction funds when the budget request is presented to the Congress in February.

The initial $18.4 billion allocation will run out in June 2007. It is feared that critics will see this as further evidence of the US Administration's failure to deal with the war's aftermath.

This move will leave Iraq with billions of dollars worth of unfinished projects and an oil industry and electrical grid that have yet to return to pre-war production levels.

Nearly half the funds earmarked for reconstruction were diverted towards fighting rebels and preparing for the Saddam Hussein trial.

$2.5 billion of the funds meant for Iraq's infrastructure and schools was diverted to building up a security force. Funds intended to repair the electricity and sewage systems were used to train bomb squad units and a hostage rescue force. The United States also shifted funds to build 10 new prisons to keep pace with the insurgency, and safe houses and armoured cars for Iraqi judges, the Washington Post said.

The reconstruction fund paid for Iraqi elections and for four changes of government. It also helped pay for the tens of millions required to establish a criminal justice system, including $128 million to examine several mass graves of Saddam's victims.

While 3,600 projects will be completed by the end of 2006, the cost of security accounted for as much as 25% of each project, according to the office of the Special Inspector General for Iraqi Reconstruction.

A US congress report in October predicted that many projects were unlikely to take shape because of the spiralling costs of security.

Production on Iraq's national electrical grid remains at 4,000 megawatts, 400 megawatts below pre-war levels. The average Iraqi now receives less than 12 hours of power a day. Oil production also remains well below pre-war levels, mainly due to sabotage by insurgents. Iraq's refineries are producing 1.1 million barrels of oil a day, compared with 2.6 million barrels on the eve of the invasion.

It is beginning to be suspected that the administration is planning a partial withdrawal of troops from Iraq before November's mid-term election in US.

On Monday, a Pentagon official disavowed Bush's ambition to provide Iraq with the most stable infrastructure in the region. "The US never intended to completely rebuild Iraq," Brigadier General William McCoy, the Army Corps of Engineers commander overseeing the work, was quoted as saying by the Washington Post.

The Washington Post also notes that less than 30% of Iraqis are aware of the ongoing reconstruction projects.

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