Bush Pulls the Plug on Iraq Reconstruction

The Bush administration has scaled back its ambitions to rebuild Iraq from the devastation wrought by war and dictatorship and does not intend to seek new funds for reconstruction, it emerged yesterday.

In a decision that will be seen as a retreat from a promise by President George Bush to give Iraq the best infrastructure in the region, administration officials say they will not seek reconstruction funds when the budget request is presented to Congress next month, the Washington Post reported yesterday.

The $18.4bn (£10.6bn) allocation is scheduled to run out in June 2007. The move will be seen by critics as further evidence of the administration's failure to plan for the aftermath of the war.

A decision not to renew the reconstruction programme would leave Iraq with the burden of tens of billions of dollars in unfinished projects, and an oil industry and electrical grid that have yet to return to pre-war production levels.

The decision is a tacit admission of the failure of the US rebuilding effort in the face of a relentless insurgency. Nearly half the funds earmarked for reconstruction were diverted towards fighting the insurgency and preparations to put Saddam Hussein on trial.

At least $2.5bn earmarked for Iraq's dilapidated infrastructure and schools was diverted to building up a security force. And funds originally intended to repair the electricity grid and sewage and sanitation system were used to train special bomb squad units and a hostage rescue force. The US also shifted funds to build 10 new prisons to keep pace with the insurgency, and safe houses and armoured cars for Iraqi judges, the Post said.

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

While 3,600 projects will be completed by the end of the year, 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 congressional report in October forecast that many reconstruction projects were unlikely to get off the ground 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, with the average Iraqi receiving less than 12 hours of power a day. Oil production, which was supposed to provide the funds for Iraqi reconstruction, according to the Pentagon's pre-war planning, also remains well below pre-war levels, mainly due to sabotage by insurgents. Iraq's refineries are producing 1.1m barrels of oil a day, compared with 2.6m barrels on the eve of the invasion.

The cut-off to reconstruction programmes adds to increasing speculation that the administration is planning at least a partial withdrawal of troops from Iraq before November's US mid-term election.

It marks a retreat from a promise by Mr Bush in 2003 to provide Iraq with the best infrastructure in the region.

Yesterday, however, a Pentagon official disavowed that ambition. "The US never intended to completely rebuild Iraq," Brigadier General William McCoy, the Army Corps of Engineers commander overseeing the work, was quoted in the Post as saying. "This was just supposed to be a jump-start."

The Post also notes that fewer than 30% of Iraqis were even aware of ongoing reconstruction projects, suggesting the US has failed to extract public relations benefit from any of the reconstruction projects it has completed.