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Poor security has undermined Iraq's reconstruction effort

BAGHDAD, Iraq—Dhia al Aftan has heard his soft-drink factory in southern Iraq runs only once a week. But he's not sure. The phones lines are down as usual and he won't risk being kidnapped to make the trip out of Baghdad.

"Here, take my mobile," Aftan said Sunday, thrusting his tiny Nokia toward a visitor. "Try to call anywhere you want. It won't work."

In a 15-minute tirade, Aftan unloaded a year of frustration over being part of an American-led, $30 billion rebuilding effort that has little to show less than six weeks before the handover of Iraqi sovereignty. Violence and sabotage, he said, plague nearly every sector of reconstruction.

As President Bush launches a campaign to rally support for his Iraq policy, the inability of coalition forces to secure the safety of individuals and infrastructure has created a vicious cycle: Economic stagnation caused by poor security fuels dissatisfaction with the U.S. occupation, which fuels an insurgency that further undermines stability.

Much of Iraq still has fewer than 15 hours of power a day. Phone service for large swaths of the country is usually down or crackling from terrible connections. Water supply and oil production hover only a hair above prewar levels, according to reports from the Coalition Provisional Authority. Thousands of Iraqis have gone without rice and tea rations because the distribution channels are too dangerous.

In April, U.S. forces launched a siege against the insurgency in western Iraq, the heartland of Sunni Islam, where Saddam drew his strongest support. It resulted in a bloody standoff in the town of Fallujah that ended when Marines turned the town over to former Saddam loyalists. Meanwhile, renegade cleric Muqtada al-Sadr began a Shiite Muslim uprising in southern holy cities, showing widespread dissatisfaction among Iraq's majority Shiite population.

At least 15 foreigners were taken hostage during the uprisings, including Nicholas Berg, a young American working on cell-phone towers who was beheaded by Islamic militants in a video broadcast on the Internet. Those incidents—plus the daily carjackings and gun battles that go unreported—posed serious setbacks to rebuilding efforts.

Only the Kurds in northern Iraq appear relatively happy, although their drift toward independence raises questions about whether Iraq can be held together.

Several private contractors and coalition reconstruction supervisors said work is picking up now after the wave of violence that began in April, but fewer sounded optimistic that Iraqis would see any sweeping improvements in their country by June 30. While CPA officials inside the heavily guarded Green Zone offer reassurances that construction continues apace, Baghdad businessmen know different.

Bandits recently killed two of Dhia al Aftan's drivers, halting important shipments of raw materials. Sabotage on electrical lines ended work at his brick factory, but he still pays salaries to 100 employees so they won't burn the place down. The roads are too dangerous, he said, for him to check on his wheat crop or his Pepsi plant.

The prosperous company started by his grandfather is losing millions, he said with a sigh. Just as he wound down his speech, collapsed in a plush chair and prepared to light a cigarette, an American helicopter roared past his window.

"Can you hear this? My children are sleeping!" he yelled. "I put my hand in the Americans' hands. Can you believe it? I honestly thought they were coming to rebuild my country."

"We can't get people to come for love nor money," said Allan Richardson, the CEO of Iraqna, an Egyptian-owned company with a two-year contract from the coalition to provide cell-phone service in central Iraq. "It's a mobile-phone network, right? But it's Baghdad—people aren't mobile. They're too afraid to go anywhere."

More than 30 employees of Halliburton, which has 24,000 workers and subcontractors in the Middle East, have been killed. The U.S. Agency for International Development, which oversees some reconstruction projects, lost about 10 percent of its non-Iraqi workers when they fled in April. Sabotage and bombings have forced giant firms such as Siemens AG, Bechtel and General Electric to suspend important water and electricity projects.

"The world has been made aware of the threat in Iraq to civilian contractors supporting the troops and Iraqis only recently," Halliburton spokeswoman Wendy Hall wrote in an e-mail responding to questions from Knight Ridder. "Our employees were prepared from Day 1 with the knowledge of the danger and the price that they could pay for their work in Iraq."

Steve Susens, a spokesman for the coalition's Program Management Office, which oversees the allocation of $18 billion in rebuilding funds, said money is finally flowing and projects are on deadline.

"Right now we've been spending $75 million a week, but we're rapidly approaching a time when we'll be spending about $75 million a day," Susens said. "We're still on pace."

The Al Janabi Group, among Iraq's oldest and wealthiest family-run companies, was one of the first local businesses to win high-stakes reconstruction contracts. Ali al Kayyat, the commercial manager, said the company was supposed to build a Home Depot in Baghdad, one of many big projects stalled by security problems. Kayyat said al Janabi has $3 million tied up in reconstruction, but "we could offer $100 million if the security improved."

"We're trying to make so many offers to foreign companies to show them how we're progressing," he said. "The problem is, we're not."

In the past month, he added, two Egyptian temps were killed in a car bombing and three Iraqi workers were injured in another explosion. An Australian employee won't travel to offer tenders on new contracts. Four Lebanese partners high-tailed it back to Beirut. Wealthy subcontractors from the United Arab Emirates now refuse to come to Iraq.

"Why does the resistance sabotage reconstruction?" Kayyat asked rhetorically. "Because they know that the Iraqi people were listening to the promises and hoping for the best, but when they go home and have no electricity and no water, they'll take their savings, buy a bomb and throw it at the Americans."

Laith Abdul Jalil, the chairman of the Iraq-based Abu Dhabi Group, said he's struggling to provide Internet stations to the U.S. military and potentially life-saving wireless radios to dozens of Iraqi police and security services. Jalil said the security situation is so bad that he no longer brags about the lucrative contracts he's secured from the coalition. In fact, he's thinking of severing his ties before he's killed for collaborating with occupation authorities, he said.

"We are conscious of the fact that the resistance doesn't see us as just trying to help Iraq," Jalil said. "We try, but our foreign investors won't come now. We would've had to pay for their security details, and those guys charge up to $1,000 a day. They refused our offer to sneak them into the country and stash them in a guesthouse on my property. I just couldn't convince them to come."

Cheers rippled among hundreds of grease-stained Iraqi workers when one of four important generators finally cranked back to life last week at a major power plant in Baghdad. But Anmar al Hassani, an Iraqi engineer working with British, German, Russian and American contractors at the plant, said many vital foreign advisers still haven't returned because of security concerns.

The coalition has vowed to get electricity production up to 6,000 megawatts a day by early next month. When asked about the deadline, Hassani was doubtful.

"By June 1?" Hassani asked. "Wait, what year are you talking about? June 1 of this year? No way."

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(c) 2004, Knight Ridder/Tribune Information Services.

PHOTOS (from KRT Photo Service, 202-383-6099): USIRAQ-REBUILD

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