ARAB-US RELATIONS - Jan. 6 - Bechtel Gets $1.8 Bn Iraq Rebuilding Deal.

Bechtel is awarded a contract valued at up to $1.8 bn to repair Iraq's electricity grids, roads, ports and other infrastructure damaged by the US-led invasion and years of neglect. This is announced as the US administration reveals plans to spend about $12.7 bn this fiscal year and $5.8 bn next on reconstruction projects in Iraq. The contract is Bechtel's second big assignment in post-war Iraq. The US Agency for International Development (USAID), the State Department arm overseeing the contract, says Bechtel and its partner, Parsons Corp, beat 2 other entrants on cost and technical expertise. USAID last year gave Bechtel an emergency $680m reconstruction contract that has since grown to more than $1 bn. In a report sent to Congress, the Bush administration says it would quadruple budgets to $400m for "democracy-building activities" - such as developing political parties - in preparation for selection of a new sovereign Iraqi government by June 30. The largest sum - $5.5 bn - will be devoted to Iraq's electricity sector, with $3.2 bn to be dedicated to security and law enforcement. The report, submitted to Congress by the White House Office of Management and Budget (OMB), says Iraqi oil revenues would jump sharply this year to about $13 bn from $3.9 bn in 2003. Following the Bechtel announcement the CPA is expected to release details on 17 new Iraq contracts worth $5 bn that could be awarded by early March. (USAID Director Andrew Natsios sought to quash the controversy over the first batch of Iraq contracts after they were granted to well-connected companies such as Bechtel and Halliburton, with little competition. "The notion that any of us are going to go in and manipulate the process is absurd", Natsios said).