The quarterly report released on Sunday and sent to Congress by the inspector-general appointed to audit US-funded work in Iraq said that security problems were the biggest obstacle to Iraq's reconstruction and that workers faced grave risks daily.

"One cannot spend a day in Iraq without quickly gaining a
profound respect for all engaged in this endeavour," said Stuart Bowen, a former White House lawyer and now special inspector-general for Iraq reconstruction.

"Their work and sacrifice in Iraq make all the more crucial our success in promoting economy, efficiency and effectiveness in preventing fraud, waste and abuse," he added in the report, released after Iraqis voted on Sunday.

No civilian tally

People working on US-funded projects in Iraq increasingly
have been the targets of kidnapping and assassination by
resistance groups, who view them as collaborators with the US military that invaded Iraq and ousted President Saddam Hussein in 2003.

More than 1400 US troops have been killed in Iraq but the US government does not keep an official tally of the number of civilians slain while working on US-funded projects there and in support of US forces.

Bowen cited US Labour Department statistics that showed
companies had filed 232 compensation claims under the Defence Base Act (DBA) for workers killed there, an increase in the fourth quarter of 2004 of 93%.

The DBA requires all US government contractors to acquire
workers' compensation insurance for employees working in Iraq.

Deaths unreported

Not all US employers would have filed DBA claims for workers killed in Iraq and the toll from civilians killed is likely to be higher than 232, said one US official. 

Attacks on US-funded work sites, convoys and employees averaged about 22 a week until 3 January, the report said

In addition, 728 DBA claims were filed for employees who missed more than four days of work. Several hundred more were reported from neighbouring Kuwait where companies working in Iraq have logistics and support operations.

Bowen said the tough security environment was delaying
projects funded by $18.4 billion set aside by Congress in 2003
to rebuild Iraq.

On 12 January, the Project and Contracting Office in Iraq, which is in charge of most US-funded work there, said security issues delayed by two weeks 17% of their projects in central Iraq and 15% in northern Iraq.

Rising security costs

Attacks on US-funded work sites, convoys and employees averaged about 22 a week until 3 January, the report said.

Auditors said the cost of paying for private security
workers in Iraq had increased dramatically and was
significantly adding to overhead costs.

US rebuilding work in Iraq has been criticised for being too slow. The report said as of 5 January, only $2.4 billion of the total $18.4 billion had been spent on rebuilding and $10.3 billion had been contractually obligated for future work.

Bowen said his office had looked at 134 potential criminal cases involving US-funded projects and 25 of these had been passed on to other US agencies, 63 had been closed and his department was still looking at 46 cases.

The report also cited an audit by the State Department that estimated US defence contractor DynCorp, a unit of
Computer Sciences Corp, may have overcharged by about $685,000 to provide fuel for a US-run police academy in Amman, Jordan.

No other details were given of the case.