| |
Bush dangles another carrot
WASHINGTON - Although the US
State Department might be "fuming" over the Pentagon's
revelation that only "allies" will allowed to bid for
US$18.6 billion in contracts for the reconstruction of
Iraq, President George W Bush remains defiant in the
face of the howls of dismay from those countries barred
from participating.
Russia has suggested that it
will not help restructure Iraq's debt - estimated at
$120 billion by the International Monetary Fund; Canada
has threatened to stop sending aid to Baghdad, and the
European Union (EU) says that it will study whether
international trade laws have been violated.
"International law? I'd better call my lawyer,"
the president responded at the White House on Thursday
in response to a reporter's question on the EU move.
Also upset is Germany, another leading opponent
of the war barred from sharing in the "spoils" of war
because, in the words of Bush: "Our people risked their
lives. Friendly coalition folks risked their lives. And,
therefore, the contracting is going to reflect that."
German Chancellor Gerhard Schroeder, who was
earlier on the telephone with Bush, said that
international law must apply to the awarding of
contracts in Iraq: "This is the task for all people, for
all of us. And because it is for everyone, we don't need
to discuss exactly who individually is participating in
the economical side of reconstruction. Here,
international law must apply and must help the cause."
Bush is unmoved, though, and he still has a few
carrots in his bag after the ones dangled around the
world in an attempt to lure more troops to help in Iraq
failed. "If these [barred] countries want to participate
in helping the world become more secure by enabling Iraq
to emerge as a free and peaceful country, one way to
contribute is through debt restructuring," Bush said.
Washington claims that Iraq's $120 billion debt is a
major stumbling block in getting the country back on its
feet. Iraq owes about $41 billion of that total to the
19-member Paris Club of creditor nations.
Asked
at a briefing at the White House whether countries had
to commit troops to Iraq in order to get contracts, or
could now opt for debt relief, Bush replied that the
latter "would be a significant contribution, for which
we would be very grateful".
A total of 26
contracts - covering areas such as oil, power,
communications and housing and rebuilding the Iraqi army
- will be on offer in early February to firms from the
US, Iraq and countries involved in the coalition effort.
The ban, however, applies only to prime contracts - not
sub-contracts. More than 60 countries have been deemed
eligible to compete for the contracts, including Japan,
Britain, Australia, New Zealand, Poland, Italy, Spain,
Turkey, Saudi Arabia, Jordan, Egypt, South Korea, the
Philippines and Romania. On Thursday, the Pentagon said
that it was delaying release of the bid specifications
"for a few days", but insisted that the delay had
nothing to do with the contract storm.
Bush's
new special envoy for reducing Iraq's debt, former
secretary of state James Baker, is scheduled to travel
to Europe on Monday for discussions in France, Germany,
Russia, Italy and Britain. The first three countries
account for much of the debt, but they might not be in
the mood for magnanimous gestures, summed up by Russian
Defense Minister Sergei Ivanov, who commented that
Moscow "now has no plans to write off our Soviet-era
Iraq debt", estimated at $8 billion.
Indeed,
according to news reports, Paris, Berlin and Moscow are
determining the extent of the "breach of international
competition laws" by the US decision on the basis of the
"right to compete", which is guaranteed under
international law. Should they push ahead, the countries
could take their case to the legal forum of World Trade
Organization.
The European Commission is also
consulting its legal branch to identify grounds for
challenging the US decision. "We are examining the
legality of the US decision to see if the ban is in line
with US obligations under world trade rules," an EU
spokesman said. "The EU position on Washington's move
will be evolved purely on the basis of international
law, and all member states are expected to support
that," the spokesman added. Earlier, the European
Commission condemned the US decision as a "political
mistake". "This decision is difficult to accept and is
unjustified," the EU's executive arm said.
On
the domestic front, Democrats have seized on the episode
with glee. "How do we get a coalition together when
we're putting it out on a government website that a
country like Canada is a national security risk to the
United States?" Marty Meehan, a Democratic member of the
House Armed Services Committee, asked.
Oil
and troubled waters
Meanwhile, in timing that at
best could be described as unfortunate, a Pentagon audit
of US giant Halliburton, an oil services firm once run
by now Vice President Dick Cheney, has found that the
firm "may have overbilled the US government by more than
$120 million on Iraq contracts".
US defense
officials said on Thursday that Halliburton's Kellogg
Brown and Root unit, which has denied any wrongdoing,
may have been overcharged by a Kuwaiti sub-contractor by
$61 million for fuel brought into Iraq from Kuwait under
a deal signed in March with the US Army Corps of
Engineers to rebuild Iraq's oil industry. That no-bid
deal, which has to date recorded about $2 billion in
business, is due to be replaced by two new,
competitively bid contracts.
The Pentagon audit
questions if Halliburton paid above-market rates to a
Kuwaiti sub-contractor when it paid $2.27 per gallon for
the gas. Another supplier bought gas at $1.18 per gallon
from Turkey. Halliburton says that the higher cost was
due to having to negotiate a short-term contract, at a
time when there weren't enough trucks in Kuwait to
deliver the fuel. It says that trucks had to be brought
in and shipping in a war zone pushed up the
transportation and security costs. In a statement,
Halliburton insisted those costs are "pass through
costs" and said that the company "only recovers a few
cents on the dollar".
There is no Pentagon
allegation that Halliburton unduly profited from the
overpriced gas.
(Copyright 2003 Asia Times
Online Ltd. All rights reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
|
| |
|
|
 |
|
