Iraq Reports by Kelly
America's Rebuilding Shuts
Boys play soccer in a field strewn
with uncollected garbage. (Photo by Kelly Hayes-Raitt, 2/03)
in Baghdad in July, I sneaked into a Bechtel meeting. I had
heard that the American company held regular, public briefings for
Iraqis interested in bidding for rebuilding contracts. As I
found my way to room 202 of the Sheraton Hotel, however, I was in
fact entering a private, non-descript suite with the only "no
smoking" sign I saw in Iraq.
I slipped in as if I were an invited VIP guest, smiling confidently
to the burly Iraqi who sat bouncer-like behind an imposing desk.
From my seat on the couch, I had a clear view of Randy Jackson, of
Dallas, Texas, whose represented Bechtel in choosing which Iraqis
received contracts to rebuild the damage at the airport, such as
fences that American tanks had demolished.
I watched team after team of Iraqi men (and one woman) wander in
with their 10-page application form completed (in English).
Once granted an audience with Mr. Jackson, they were asked questions
such as: "How many employees do you have?"
"How old is your equipment?" "Do you have
This last question was a stopper. Before this last war, there
were six insurance companies in Iraq, the largest of which were run
by Saddam Hussein's government. They offered basic auto and
casualty insurance, workers compensation and liability insurance
with maximum policies of either 200 million or 150 million dinars
(about $100,000 or $60,000, respectively). As of July,
only one insurance company was operating. The others had been
shut down or looted.
"But the government was our insurance," said one Iraqi,
shrugging his shoulders.
To get a job rebuilding their country, Iraqis are required by
Bechtel to carry three types of insurance:
$2 million minimum
indemnification insurance, which costs up to 10% of the
contract's cost, covers misfortunes such as equipment loss and
injured workers. The $2 million minimum policy is 20 times
Iraqis' previous insurance policies' maximum, and far exceeds
Iraqis' ability to afford it, or the local insurance companies'
ability to underwrite it.
insurance, where banks provide a guarantee that the company will
not withdraw its bid. The Iraqi contractor bidding on the
project must provide a cashier's or certified check for 10% of the
projected amount of the project. As of July, 43 of the 47
banks were at some level of operation, but it was unclear if they
had the capacity to issue bonds. The 10% bond may be held for
the duration of the contract.
guarantees that the job is completed. It, too, can cost 10% of
the projected cost of the contract.
Although Iraqis are used to advance payments, Bechtel is not
providing any up-front money. So, Iraqis hoping to participate
in the rebuilding of their country have to advance money for
materials, labor, insurance policies and bonds at a time when they
are emerging from 50% unemployment, three wars and 12 years of
sanctions. On top of it all, Iraqi contractors must read and
agree to the Federal Acquisition regulations - a 3,000-page document
written in English.
"These are American tax dollars," Randy Jackson said to a
despondent Iraqi. "Americans don't want to pay for
insurance; they want to pay for rebuilding."
"Where do I get insurance?" asked the Iraqi.
"If you don't have insurance, you can't get a contract with
Bechtel," boomed the imposing Iraqi behind the desk.
"Don't worry, there will be American insurance companies coming
in to sell you insurance," Randy Jackson offered.
"Two companies like yourself have already obtained insurance
from American companies. We have a BIG Bechtel managing team
to work with you."
As I watched the contractor slowly rise from his chair, I realized
that Iraqis must now buy insurance from American companies in order
to work for an American company to rebuild the airport that the
Americans bombed. It occurred to me that this war is a warped
WPA program for well-connected American companies.
While reviewing the application of one Iraqi team, Randy Jackson
brightened and said, "I'd like to work with you. If we
can't get something going here, then maybe (we can) in Iran."
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