David R. Baker / San Francisco Chronicle – 2005-01-28 22:40:57

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/01/28/BUG46B1PJO1.DTL

(January 28, 2005) — When Iraqis go to the polls Sunday, they could determine the fate of reconstruction in their ravaged country.

US firms hired to fix Iraq’s broken power plants and sewage systems already have seen their progress slowed by the country’s relentless insurgency, which has sabotaged their projects and killed at least 300 of their employees. If Sunday’s election triggers a civil war between Sunni and Shiite Iraqis — a conflict some analysts consider likely — reconstruction may grind to a halt. It could, analysts say, prompt the United States and its contractors to leave Iraq earlier than planned.

If, however, the election gives the country’s government greater legitimacy among ever-skeptical Iraqis, it could make the work of companies such as San Francisco’s Bechtel Corp. far easier. Contractors could eventually move between job sites more freely, spend less on armed guards, and worry less about their American and Iraqi employees now targeted for death.

“If the poll is disorganized and the Sunnis don’t turn out, then it probably means the United States is going to have to rethink its strategy,” said Loren Thompson, an analyst with the Lexington Institute think tank in Arlington, Va. “If it goes fairly well, that will reassure Bechtel and the other companies that the US government will stick with the plan.”

The companies have already modified their operations to prepare for the election.

Most contractors have told their employees to hunker down in their fortified compounds as the vote nears and avoid travel on the country’s lawless roads unless absolutely necessary. Iraqi employees have, in some cases, melted away from work sites, staying at home as the insurgents step up their intimidation campaign.

Of course, difficult working conditions are nothing new. Reconstruction engineers have endured countless swings in Iraq’s level of violence before. They are paid with US taxpayer money, work for the US government and say they intend to finish out their contracts. They hope the vote brings some stability.

“We want to mirror the optimism of the administration and the field commanders in that, by allowing the Iraqis to have this stake in their own future, they will perhaps step up and take more responsibility for security,” said Earnest Robbins, senior vice president and manager of the international division of Parsons Corp. The Pasadena firm repairs Iraqi oil field equipment and destroys captured ammunition.

If the election triggers a civil war? “We’ll look real hard at whether we belong there or not and whether the US government would want to intervene,” Robbins said.

The insurgency has, so far, not been able to stop reconstruction. But it has exacted an awful price.

The Western firms rebuilding sewage plants and rail lines, hospitals, and oil pipelines have been forced to live under armed guard, restrict their movement between towns and, in some cases, fix the same equipment again and again. Money that should have gone to repairs now goes to security.

One federal reconstruction official recently estimated that security accounts for 10 to 20 percent of each company’s overhead costs. Some analysts consider that estimate low.

The precautions sometimes aren’t enough. As of Jan. 18, at least 240 American contractors had been killed in Iraq, according to insurance data reported to the Department of Labor. It’s an incomplete list, which doesn’t include, for example, the 60 employees of defense contractor Halliburton who have died in Iraq.

Iraqis working with Western companies have come under frequent attack from the insurgents, although no one has yet compiled a full list of those killed. At least two Iraqis working with Bechtel, for example, are known to have died during the past year.

Despite Violence, the Work Continues
Bechtel recently finished a $23 million drinking-water project in Basra that the company began in 2003. Bechtel dredged a silted-up, 149-mile canal that brings fresh water to Iraq’s second-largest city, which has seen far less recent violence than Baghdad. The firm also refurbished 13 water-treatment plants there and fixed a pumping station.

The project nearly doubled the amount of fresh water flowing into Basra. But in an example of reconstruction’s frustrations, many residents still can’t get a steady flow in their sinks. The city’s distribution pipes have too many holes and illegal taps. The water seeps out into the dirt beneath Basra.

“You’ve got so many taps in it, the water can’t get to the end of the line,” said Bechtel spokesman Greg Pruett, speaking from Baghdad.

Pruett said he didn’t want to predict how the election would affect Bechtel’s work environment. “The one thing I’ve learned here in Iraq is, every day stands on its own,” he said.

Bechtel, like other reconstruction companies, will let its Iraqi employees skip work to vote, if they chose to go to the polls. Pruett said several Iraqis he has spoken with have vowed not to let anyone keep them from voting.

“We certainly have told all our Iraqi employees that … they absolutely have time to go vote, just like in the United States,” Pruett said.

Some Iraqi reconstruction workers already are staying home.

“As the violence has increased in the last two weeks, we have seen an increase in the number of people on our jobs who’ve declined to continue working, due to concerns about their own safety,” said Jerry Holloway, spokesman for Fluor Corp. of Aliso Viejo (Orange County), which performs electrical repairs.

“On the other hand, we’ve been able to fill those slots with other people willing to work,” he added.

With the election approaching, the scope of the violence has spread. Kenneth Kurtz, whose San Francisco company supplies security guards to reconstruction companies, said some of the country’s many political parties and factions have begun to attack each other.

“You don’t just have the insurgents fighting the military,” said Kurtz, chief executive officer of the Steele Foundation. “You now have the added issues of political instability.”

Kurtz said he is reducing the number of his men in the country, although he declined to give specifics.

He said Steele has no intention of leaving the country entirely, since working in high-risk environments is part of the company’s job. But Kurtz said he feared that fighting among Iraqis could spread after the election if, as expected, the long-dominant Sunni Arabs lose power to the Shiite majority they once repressed.

“You see the pieces coming together for civil war,” he said.

E-mail David R. Baker at dbaker@sfchronicle.com.
©2005 San Francisco Chronicle
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