The
U.S. Government, through its Agency for International Development (USAID),
let a contract for Iraq work shortly the U. S. troops moved into Baghdad
in April 2003. This was Iraq Infrastructure I, originally funded for $680
million and subsequently increased to $1 billion. Bechtel National, Inc.,
won that competitive contract. Within months USAID solicited bids for
Iraq Infrastructure II, which was to be for up to $1.8 billion and likely
would extend through December 2005. Bechtel National won that competitive
bid also.
The man now in charge
of these two contracts, Cliff Mumm, has worked for Bechtel for 29 years
but may not have faced a bigger and more scrutinized challenge than he
does this year.
“This is a tremendous
amount of, work in the time allotted,” says Mumm from his Baghdad
office. Mumm is a Bechtel partner and is accustomed to managing huge projects
under tremendous deadlines compounded with public scrutiny and political
controversy. Notably, this includes the Jubilee Line for the London subway,
which crossed the Thames River four times and had to be completed in time
for the Millennium Celebration but was behind schedule when Mumm took
it over. So political was this work that Mumm often had to meet with British
Prime Minister Tony Blair. Bechtel got the job done on time, and Mumm
was awarded Honorary Commander of the Most Excellent Order of the British
Empire (CBE).
Mumm’s digs
are considerably different today. Bechtel works in a country traumatized
by war, plagued by terrorist attacks and burdened with an infrastructure
that was in tatters even before the bombs began to fall. Not the least
of the challenges is dealing with expectations - both those of the U.S.
media and of the Iraqi people - for a swift and complete reconstruction
of the country. That far overstates Bechtel’s charge, whose original
assessment of Iraq’s infrastructure estimated such work would require
perhaps $20 billion and at least a decade.
Mumm was trained in
chemical engineering at the South Dakota School of Mines and Technology.
He has worked around the world at just about every type of engineering
and construction job there is (though not telecommunications, he points
out, something he is wrestling with in Iraq). He’s had oversight
for major projects such as Reliance Industry ’s Jamnagar (India)
petrochemical complex, Kazakhstan’s Tengiz oil field petroleum processing
facility, and Saudi Arabia’s Shoaiba Saline Water Conversion Corporation
project. He has worked on railroads, power plants and much more. He was
in charge of Bechtel worldwide construction when he was asked to take
on the Iraqi contract.
The Bechtel team set
to work in April and arrived in Iraq in mid May. They set up camps in
major areas, the largest now being at Baghdad and Basrah. Of immediate
priority was opening Umm Qasr, the country ’s only deepwater port.
The main job here was dredging, although the work also included the reconstruction
of grain silos. This project took most of the summer and fall, but under
Bechtel’s guidance the efforts allowed deepwater grain ships to
enter. Hundreds of thousands of tons of grain and humanitarian aid have
now passed into Iraq through Umm Qasr.
Bechtel also renovated
more than 1,200 schools throughout the country with the goal of completing
at least 1,000 of them in time for the October 1 start of the school year.
The schools program employed over 30,000 Iraqi workers. The work included
cleaning, painting, plumbing and replacing the likes of windows, fans
and doors that had been broken or looted. Ultimately, over 1,100 of 1,239
renovated schools were ready by October 1; one million Iraqi children
entered and resumed their studies.
THE USAID
CONTRACT
Bechtel’s USAID
contract also covers roads and bridges, water and wastewater treatment
plants, airports and power plants. It includes rebuilding the Al Mat Bridge
bypass on Highway 10, a 4-lane critical route between Baghdad and Amman,
Jordan. Already by the end of last year Bechtel completed work on the
Safwan water supply system near Basrah, delivering clean water to 40,000
residents. The project is doing the same kind of water and wastewater
work in Baghdad and places a cross the country. It has installed communications
systems and power supply to the nation’s two major airports, opening
them again to limited commercial service. It is helping upgrade the nation’s
railroads and it is repairing telecommunications hubs. Besides all this,
Mumm says, the company is overseeing efforts for training and development
to improve the engineering, construction and project management skills
of the nation’s professional workforce.
Bechtel’s goal
has been to award 70 percent of subcontracting to Iraqis and so far it
has been meeting this goal. “The Iraqi engineers are good and they
are hungry for knowledge,” says Mumm. “They are computer literate,
but as was the case in Eastern Europe under the communists, here they
were working with outdated and failing equipment. Owing to Saddam and
the sanctions imposed on the country, Iraqi engineers spent much of their
efforts merely keeping things patched together. They were deprived of
modern equipment and techniques.” As to subcontracting 70 per- cent
to Iraqis, Mumm says that this was not only a method of getting the work
done, but also “the right thing to do.”
Mumm reports that
most of the damage to the infrastructure of the country was not a result
of the war. “The Coalition armed forces said they were taking out
targets surgically, and by and large that is what they did. They would
bomb, say, a telecommunications station but the houses around it were
not damaged.” More of the trouble with the infrastructure owes to
Saddam’s policies and the depredations of living for so long in
near isolation from the rest of the world. “Saddam, for example,
did not use wastewater treatment plants to clean water; rather he stored
diesel fuel in them,” Mumm says. All the sewerage in Iraq before
the war was dumped into the country’s rivers.
“Transporting
anything here is still a problem,” Mumm confesses. “It’s
hard to get a transporter, and just as difficult if not more so to obtain
insurance for the transportation.”
Another challenge
was the subcontracting. Under Saddam, each government ministry had its
own construction arm. But Bechtel had to work with private contractors,
of which there were few. “We’ve had to stand up the whole
system here,” Mumm reports. “We organized conferences, streamlined
qualifications, got companies qualified and more. The Iraqis did not have
operating capital nor a system for workman’s compensation. Bechtel
put up its own operating capital for subcontractors and assembled an insurance
package. We are very proud of that.”
THE ELECTRICAL
POWER PROBLEM
The electrical power
problem has gotten special attention by the media. “The power system
was a disaster,” says Mumm. “Under Saddam, there was no regular
maintenance as we know it. Engineers were told to keep the plants operating
but with little or no resources. They were threatened with jail or worse
if they could not keep them running, but the equipment was decrepit.”
And it was not really so much power. The pre-war output was an operating
4,400 MW out of a nominal capacity of 10,000 MW. Saudi Arabia with a similar
population produces 14,000 MW. Moreover, Saddam was sucking power from
around the country to supply Baghdad. Doing so allowed Baghdad about 22
hours of power a day while Basrah was allowed only two to four hours of
power a day. After the war, transmission lines and towers were looted
for their metal or toppled in the countryside by angry locals who wanted
to make sure power was no longer exported from their regions to keep the
lights on in Baghdad.
Bechtel played a large
role as a member of the power action team - formed last summer by the
Coalitional Provisional Authority - that included the U.S. Army Corps
of Engineers and the Iraqi Ministry of Electricity. The team tripled electrical
output from 1,275 MW in April to pre - war levels. This is not noticed
so much in Baghdad, which received far more than its fair share before
the war, as in outer lying areas. Basrah for example now has 22 hours
of power a day, rather than the pre-war two to four.
Power in Iraq is mainly
fueled by diesel, natural gas and crude oil; crude is preferred. Bechtel’s
work is rehabilitation.
Building new power plants is going to have to wait. Over the long run,
“only about 2,000 MW here is salvageable,” Mumm says. “Eventually
we’ll have to add 2,000 MW to retain the pre-war level. But then,
just to get up to Saudi levels, at what we call ‘the Gulf Standard,’
the nation is going to need about another 12,000 MW. In pre-war Iraq only
four percent of the population had telephones, one of the lowest standards
in the world. Billions of dollars are going to be needed, and it is all
going to take a good deal of time. We think we can produce about 6,000
MW nationwide by this summer, with Bechtel helping to accomplish that
goal by adding about 900 MW of new and rebuilt generation. That’s
about all anyone could do with the existing plants. After that will have
to be new ones. The country will need about eight new power plants; it’s
going to be expensive and it’ll take four years at least.”
Bechtel has had more
than 60 years experience in the Middle East. It worked in Kuwait after
the Gulf War of 1991, extinguishing 650 oil fires and managing environmental
cleanup. Bechtel has also had extensive experience working with USAID,
not only in the Middle East but also in Africa. Bechtel’s efforts
under the recently awarded phase II contract are in conjunction with Parsons
of Pasadena, CA, and Horne Engineering Services of Fairfax, VA. Mumm says
that Parsons will be doing a good portion of the water work and Horne
the procurement.
“But I believe
there is going to be an economic boom here,” he says. “The
demand curve is going to be way out in front of the supply curve for years.
With a bit of increasing prosperity, the Iraqis are going to want to buy
more refrigerators. That is going to spark demand for more power. As the
lights go on, crime will come down. More people will open businesses,
again fueling the demand for more power. Oil refineries are going to demand
electrical power. Advances will build upon themselves over and over. It’s
very interesting to see how water treatment, petroleum and power are all
interconnected, each causing demand for the others. I believe that investors
are going to gain confidence in the country and capital will come in.”
Mumm’s optimism
mirrors that of younger Iraqis. Although, as in Eastern Europe, “a
generation of engineers was deprived of up-to-date training and experience,”
he says, “those in their 20s and 30s are eager and they have lots
to be optimistic about.” Mumm reflects that confidence. He has a
huge job in harsh circumstances, but he has no doubt that Bechtel will
get it done.
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