Nearly a week after a former reconstruction official pleaded guilty to charges related to a corruption scheme, the Special Inspector General for Iraq Reconstruction told the Senate Foreign Relations committee Feb. 8 that security, not corruption, is a growing concern in the effort to rebuild Iraq’s infrastructure.

The inspector general, Stuart W. Bowen, Jr., says increasing security issues at reconstruction projects are contributing to a “reconstruction gap” between expectations and results.

“The story of the reconstruction gap is fundamentally about security needs driven by a lethal and persistent insurgency,” Bowen says.

Contractors of all types have reported 467 fatalities.

Bowen notes that only 49 of 136 projects originally planned in the water sector will be completed under current Iraq Relief and Reconstruction Fund allocations. Three hundred of the 425 projects planned for the electricity sector will be completed.

The shortfalls follow a 2004 IRRF reprogramming that reduced water sector allocations from $4.3 billion to $2.1 billion in order to increase security funding. The electricity sector dropped from $5.6 billion to $4.3 billion during that reprogramming, Bowen reports.

Routine reports of kidnappings, murders, attacks, bombings, vandalism and threats continue to pose extraordinary challenges to contractors, Bowen says. Since reconstruction began in March 2003, 467 death claims for contractors of all nationalities have been submitted under the Defense Base Act, according to the U.S. Department of Labor.

Security costs represent 16 to 22 percent of the overall costs of major infrastructure projects, according to a State Department report last month. Bowen reported that costs for security of contractors have risen on average more than 25 percent during reconstruction.

Joseph A. Christoff, the Government Accountability Office’s director International Affairs and Trade, echoed Bowen’s comments to the committee.

In his testimony, Christoff notes examples of project cancellations and delays. In March 2005, USAID cancelled two task orders for power generation projects valued at $15 million in order to help fund security issues at another project site. Security concerns also led to the four-month delay of a sewer repair project in 2004.

With 84 percent of the $18.4 billion IRRF obligated under contract, Bowen recommends focusing on sustaining current projects rather than completing the entire list of proposed projects.

Bowen also addressed recent concerns over contractor fraud following last week’s guilty plea by a former reconstruction official. Robert Stein, who was in charge of $82 million in funds in the South Central Region of Iraq, pleaded guilty to corruption, bribery and weapons charges last week.

Bowen notes that the Stein investigation involved funds from the now-defunct Coalition Provisional Authority and that his office currently focuses on the IRRF. Bowen says his office has found limited evidence of crimes involving IRRF programs.

“Corruption is not a pervasive problem on the U.S. side of the reconstruction program,” he says.

Rather than systemic corruption, audits have focused on inefficiencies and waste in the management of reconstruction contracts, projects and finances, Bowen says. A lack of cost-to-complete estimates and other critical data have hindered efforts to gauge the reconstruction effort, he says.