By Rhys Jones
US construction giant is forced to pull back from construction projects in high-risk areas of Iraq, but claims it will stick to its timetable and be out by late 2005
Increased fighting in Iraq has forced construction giant Bechtel to pull back from rebuilding projects in high risk areas, but the company said it is sticking to its timetable and will complete its work and be out of the country by the end of 2005.
Two Iraq contracts worth around US $3 billion, received from the US Agency for International Development (USAID), are contributing to strong revenue and bookings disclosed by the company.
Revenue in 2003 rose by 40% to a record $16.3 billion and the value of new work booked increased 65% to about $21 billion, the company said in a review of 2003.Jude Laspa, executive vice president & deputy chief operating officer, said in an interview that the company expects gains in 2004 in liquefied natural gas terminals, mining contracts, petrochemicals, power plant construction, and airport expansion.However, the violent surge in fighting across Iraq this month has complicated Bechtel’s task, Laspa added.
“We work with USAID to pull back when the going is too risky, to redeploy to other areas. The events of the last month have made it more difficult to redeploy our workers,” said Laspa. “There is very little activity in the hot spots and none in Fallujah,” he added.
Despite the violence, Laspa said Bechtel was “quite pleased with the progress made in Iraq. We are largely on target to date on plans agreed with USAID after we completed our initial assessment on the ground.”
Bechtel’s first contract is up at the end of this year and the second at the end of 2005, but the actual work depends on specific ‘task orders’ to move ahead with projects.
“Unless there is an extension or a new contract, Bechtel will be out of Iraq at the end of next year. Hopefully we will have accomplished the task orders assigned to us,” a Bechtel spokesman said. A contract watchdog group, however, was skeptical
“Given the current circumstances, I don’t know how anyone could get anything done. How can you stay on budget and time lines with near chaos?” said Danielle Brian, executive director of the Project on Government Oversight.Bechtel declined to discuss its security operations in Iraq, but has confirmed that a subcontractor was killed in a mortar attack in Baghdad in March.
Outside Iraq, Laspa said Bechtel has other projects underway. Among them is a $5 billion contaminated waste cleanup at the former Hanford plutonium production station in Washington, USA as well as an aluminum smelter project, which is currently under construction in Bahrain.