Haliburton Iraq contracts worth $2 bn
Iraq reconstruction contracts awarded to Haliburton Co., the US oil services company formerly headed by Vice President Dick Cheney, are now worth as much as $2 billion and could further increase in value.
The US Army Corps. of Engineers awarded contracts both to Haliburton and its subsidiary Kellogg, Brown and Root (KBR).
Haliburton’s 10-year “field service” contract which was awarded in 2001 is valued at about $1 billion, while KBR’s pact, awarded outside of a competitive bidding process, to rehabilitate is worth $948 million, army spokesman Dan Carlson said.
Both deals have come under intense congressional scrutiny, though KBR’s contract has received particular attention. Cheney resigned as chief executive officer of Haliburton to become US President George Bush’s running mate in 2000.
“The total amount needed is directly tied to how quickly Iraq can restart the oil system production and level storage supplies throughout Iraq,” the army spokesman said. Halliburton has so far received $247 million in payment for work done.
Fuel costs
The spokesman added that the total bill could rise when fuel costs such as diesel, benzene and liquefied petroleum gas are included. Haliburton is importing these products to the war-torn country until the Iraq’s oil industry can be restarted.
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“It is impossible to conceive how a reasoned assessment of the costs of restoring Iraq’s oil infrastructure could be made without consulting the experts at the Corps of Engineers” Excerpt from Waxman, Dingell letter |
Company spokeswoman Wendy Hall defended the contracts saying they are part of the US effort to help the people of Iraq.
In a related incident, US Representatives Henry Waxman and John Dingell both attacked the government’s request to boost spending on oil reconstruction by a further $2.1 billion.
Cost increase
“The new request more than doubles previous cost estimates and was apparently prepared without consultation with the Army Corps of Engineers, the agency in charge of Iraqi oil reconstruction,” the lawmakers wrote in a letter to budget officials, AFP reported.
“This is hard to comprehend. It is impossible to conceive how a reasoned assessment of the costs of restoring Iraq’s oil infrastructure could be made without consulting the experts at the Corps of Engineers,” they added.
Dick Cheney was given a $30 million golden handshake when he left Haliburton. Since then he has received deferred payments of about $180,000 a year.
Legislators have also attacked the fact that KBR has won a string of contracts despite failing to control the cost of its reconstruction jobs in the Balkans and being fined $2 million following claims of fraud at a US military base.