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Bechtel wins giant Iraq contract

US construction giant Bechtel has landed a contract worth up to $680m (£433m) to help in the rebuilding of Iraq.
The deal is the fifth and by far the largest to be handed out by the US Agency for International Development (USAID), as part of the reconstruction and humanitarian effort in Iraq.

It covers infrastructure repair work on power generation facilities, electrical grids, municipal water systems and sewage systems.

Bechtel has a track record of working in Iraq and was in the country at the time of the last Gulf war.

Local people

More than 100 Bechtel employees and their families were interned when Iraq invaded Kuwait.

The company had been building a petrochemical complex 60 miles south of Baghdad.

"Bechtel succeeded in extricating its employees before the Gulf War began and had no further involvement with the project," a company spokesman said.

Bechtel also built a hydrolectric dam in northern Iraq, near the Turkish border, between 1983 and the early 90s, and carried out pipeline work dating back to the 1950s.

Commenting on Thursday's award, Tom Hash, President of Bechtel National, said: "Bechtel is honored to have been selected, through a competitive process, by USAID to help bring humanitarian assistance, economic recovery and infrastructure to help the Iraqi people."

Congressional approval

The initial USAID award is for $34.6m, although Bechtel's contract could be worth up to $680 million over 18 months.

The larger amount would be subject to congressional approval.

There is also a provision in the contract for the rehabilitation or repair of airport facilities, and the dredging, repair and upgrading of the Umm Qasr seaport, USAID said.

The rehabilitation of Umm Qasr Port and selected airports will be an immediate priority

Bechtel may also have a role in repair and reconstruction of hospitals, schools, selected government ministry buildings, irrigation facilities and transportation links.

USAID said Bechtel probably would hire subcontractors for many of the projects.

"Through all of its activities, it will also engage the Iraqi population and work to build local capacity," the announcement said.

Education system

Earlier this month, Two US companies won contracts worth a total of $10m (£6.4m) for reconstructing Iraqi local government and education.

Research Triangle Institute picked up a $7.9m deal to provide technical assistance to strengthen local administrations, civic institutions and civil society.

Creative Associates International (CAI) was awarded a $2m, 12-month contract which USAID said was "to address immediate educational needs and promote participation of the Iraqi people in a sustainable, decentralized educational system".

Criticism

USAID earlier awarded a $4.8m deal for managing Umm Qasr Port to Stevedoring Services of America and a $7m contract for USAID personnel support to International Resources Group.

A contract to put out oil well fires and repair oil facilities was awarded to US engineering firm Kellogg Brown & Root by the US Army Corps of Engineers.

Four USAID contracts remain to be awarded, for airport reconstruction, logistical support, public health and a project aimed at promoting civic participation.

The Bush administration has come under fire from Democrats for not allowing open competitive bidding, but rather inviting a small number of firms to submit proposals.