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Iraq: Violence Slows Bechtel in Iraq

by David R. BakerSan Francisco Chronicle
March 23rd, 2004

Violence has slowed or interrupted work at approximately 10 percent of Bechtel Corp.'s reconstruction sites in Iraq, government and company representatives said Thursday. 

"Everything in Iraq has been affected by the security situation; our work is not immune," said Bechtel spokesman Francis Canavan, from Baghdad, stressing that the overall timetable for repairs has not been affected by the recent surge of attacks. 

From the beginning of Iraq's reconstruction, looting and sabotage have driven up the effort's multibillion-dollar cost and slowed an effort already measured in years. 

Now insurgents are trying to shoot or kidnap reconstruction workers and their guards. 

Observers say that will further delay repairs that Iraqis complain have taken far too long. 
"When you can't get convoys through with supplies, you can't do electrical repairs, you can't get water running," said Svetlana Tsalik, director of Revenue Watch, a nonprofit organization tracking the money spent on Iraq's reconstruction. "In the last few weeks, most reconstruction has come to a standstill." 

Despite the violence, Bechtel and government representatives say most work has continued. But the threats workers face -- from mortar attacks to roadside ambushes -- have forced companies to adapt. 
The hostile environment has forced two Bechtel subcontractors -- General Electric and Siemens -- to curtail or suspend their operations and has, at times, blocked workers from reaching job sites. 
Government officials, however, say it is too soon to gauge the insurgency's full effect on Iraq's reconstruction. 

"It depends on how long these problems will last," said Tom Wheelock, infrastructure director for the U.S. Agency for International Development. 

When Fallujah erupted in anti-American violence late last month, conditions grew so dangerous that many non-Iraqi workers and engineers couldn't venture outside their offices and fortified compounds, Wheelock said. Since then, the attacks have eased. 

"It's gone down," said Wheelock, on the phone from Baghdad. "Are we out of the woods yet? I'm not sure." 
At the height of the fighting this month, most of Bechtel's work in the field fell to Iraqi subcontractors, Wheelock said. 

They too have been threatened by the insurgents, but Iraqi engineers have a far easier time than their Western counterparts moving from one site to another without attracting attention. 
"It's the Iraqi companies that are out there doing this work in the power plants, in the water plants," Wheelock said, in an interview earlier this month. 

After insurgents killed and mutilated four security guards in Fallujah on March 31 and abducted Halliburton employees on April 9, several reconstruction companies responded by keeping some of their people out of the country. 
Employees on leave outside Iraq during the flare-up were told to report to offices in neighboring countries rather than return to Baghdad, said a government official who requested anonymity. 

Bechtel has moved employees around its five Iraq work camps as well as its offices in Jordan and Kuwait. Canavan said, however, that safety was just one of the reasons. 
Some moves were dictated by the schedule of work in different locations, and some by the desire to perform as much administrative work as possible outside of Iraq. 

Bechtel's caution with its people has paid off. Although the company won't discuss security matters, just two deaths have been reported in its work crew so far. 
The first was a subcontractor who drowned while working at Iraq's Umm Qasr seaport; the second was a subcontractor killed by a mortar attack in Baghdad. 

Halliburton, in contrast, has lost more than 30 employees or subcontractors in Iraq during the past year. 
General Electric and Siemens both have been working on electrical repairs in Iraq, with Siemens also helping to install a mobile phone network in the north. 

Iraq's electricity minister told the Associated Press that Siemens pulled most of its people from the country earlier this month. A company spokeswoman would not comment directly on that report Thursday but said the company remained committed to Iraq's reconstruction.
 
A General Electric spokesman also would not comment on whether his firm had removed its employees from Iraq. He said, however, that the company's efforts to keep its people safe had slowed its work. 

"Some of the projects that we have been involved in, there have been delays because of the security measures we've put in place," said Gary Sheffer, the company's general manager for public affairs. "But we're continuing to work with our customers to get those contracts done."



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