The contract, awarded by the United States Agency for International Development (USAID), will pay Bechtel an initial $34.6 million, but total payments could reach $680 million over 18 months, according to a statement released Thursday by the USAID. The larger amount is subject to congressional appropriation.
USAID officials said Bechtel would repair and rehabilitate the country’s infrastructure, which was “a priority of the U.S. government’s effort to strengthen Iraq’s economy and ensure delivery of essential public services to the Iraqi people.”
Bechtel, the San Francisco-based construction giant, will repair and redevelop Iraq’s electrical grids, power plants, sewage systems, municipal water systems, and waterways. Bechtel may be involved in the repair of Iraq’s schools, hospitals, government buildings, and irrigation structures.
The company’s first project will be to dredge and repair the southern seaport of Umm Qasr, a major gateway for food and medical supplies, and repair Iraq’s damaged airports.
“Bechtel is honored to have been asked by USAID to help bring humanitarian assistance, economic recovery, and infrastructure reconstruction to the Iraqi people,” Tom Hash, President of Bechtel National, said in a statement. “We will now begin meeting with USAID to start detailed planning on this important effort.”
The contract gives Bechtel one of the leading roles in the American reconstruction plan for Iraq. Some in Europe and the United Nations have criticized the Bush administration plans for not providing a large enough role for the international community in both overseeing and conducting the rebuilding.
Total reconstruction costs for the nation ravaged by three major wars in the last 20 years are estimated at $25 billion, the New York Times reported on Friday. Although U.S. taxpayers will pay for the costs of the Bechtel contract, Iraqi oil revenue is expected to eventually cover the majority of the overall costs.
The announcement has attracted criticism from several congressional Democrats, including U.S. Representatives Henry Waxman (D-Calif.) and John Dingell (D-Mich.), who claim the bidding process was secretive and unduly influenced by political connections and contributions.
All of the U.S. companies bidding on the contract — Parsons Corp., Fluor Corp., Louis Berger Group Inc., and Washington Group International Inc. — have donated $3.6 million over the last three years to U.S. politicians, mostly to Republicans, according to the Center for Responsive Politics, a government watchdog based in Washington D.C.
Bechtel and its employees contributed $1.3 million to federal candidates from 1999 to 2002, with 59 percent going to Republicans, the CRP said.
The company also has several close associations with previous Republican administrations. George Shultz, secretary of state during the Reagan administration, is a current Bechtel director. Past Bechtel executives include Caspar Weinberger, appointed defense secretary by former President Ronald Reagan in 1980, and William Casey, a former CIA director. Riley Bechtel, the company’s chairman and chief executive, was also recently appointed to President Bush’s export council.
Officials at USAID and in the Bush administration have denied that those connections played a role in the bidding process, saying contracts are awarded to the most qualified companies.
Bechtel has also rejected the criticism, saying few companies have the logistical knowledge and engineering expertise needed to undertake the Iraq contract.
The 105-year-old Bechtel’s most illustrious construction and engineering projects include the Hoover Dam, the English Channel tunnel connecting Britain and France, and the Trans-Arabia pipeline, which supplies Saudi Arabian oil to world markets. It also oversaw the so-called “Big Dig” project in Boston, Mass.
The company employs around 47,000 people worldwide working on over 900 projects in 60 countries.
Despite company claims, anti-war protesters have demonstrated in front of the company’s San Francisco office in recent weeks to protest what they say is war profiteering by the firm.