Financial Times
US government officials have expressed doubts about whether the Iraqi government will be able to sustain US-funded reconstruction projects next year because of the volatility of Iraq’s oil sector, its main source of revenue.
A report by the special inspector general for Iraq reconstruction, Stuart Bowen, this week also said it was uncertain whether there were sufficient US resources available to support projects before they could be transferred to the Iraqi government, raising questions about the fate of the $20bn (€15.6bn, £10.6bn) reconstruction programme in the next few years.
Mr Bowen concluded that a successful handover of US-funded reconstruction projects to Iraqis would require a “multi-year” effort dependent on more US, Iraqi and other resources, given the expected funding shortfall and the complexity of the operation.
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According to Mr Bowen’s report, the Iraqi government faces a cut-off date of September 30, at which time the $18.4bn US fund to reconstruct Iraq will either be obligated under contracts or will no longer be available to support projects in Iraq.
The US estimates that it will cost about $1.2bn a year to sustain US-funded projects, and that the US office charged with managing the reconstruction has roughly $372m available in its budget for 2007 for this purpose. That leaves the brunt of the sustainment cost for sectors ranging from oil, to electricity, to water – about $828m – in the hands of the Iraqi government.
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