Add Bechtel National Inc. to the growing list of U.S.-based multinational contractors that are leaving major projects in Iraq. The U.S. government is terminating the San Francisco-based company's contract to build a high-profile children's health care facility, according to the July 28 edition of the New York Times. The U.S. State Dept., citing schedule delays and cost overruns that pushed the project from $50 million in 2003 to an estimated $120 million today, said it will transfer project management of a cancer treatment center in Basra from Bechtel to the U.S. Army Corps of Engineers.

Cliff Mumm, Bechtel's infrastructure division president, told the Times that security problems were the cause of cost escalations and schedule delays. He predicted that the Corps would not be able to complete the job. That would be even more of an embarrassment for the Bush Administration than other ill-fated efforts to reconstruct Iraq. First Lady Laura Bush and Secretary of State Condaleeza Rice have both used the hospital as an example of U.S. good intentions. Iraqi spokesmen disputed Bechtel's contention that the job is too dangerous to manage. The U.S. system of funneling $18.4 billion in reconstruction funds through large contractors who in turn subcontract work through regional and Iraqi firms is ineffieicent and wasteful, they say.

Related Links: Bechtel memo of events at Al Basra Children's Hospital ( 94 kb, )

Earlier in July, the Army announced that it will restructure the contract that has made Halliburton KBR the largest U.S. contractor in Iraq. The Houston-based firm formerly headed by Vice President Dick Cheney has pocketed more than $10 billion in government contracts since the war in Iraq started. Government audits and Congressional critics have alleged substandard work, fraudelent billing practices and other abuses. Halliburton consistently maintains that allo criticism is politically motivated.

Pasadena-based Parsons Corp. has been terminated recently from two jobs constructing prisons in Iraq. Once again, the government cited slips in schedule and escalating costs. And once again, the overriding lesson learned seems to be that the current U.S. rebuilding strategy is doomed to fail as long as the security piece of the equation remains unsolved.

Read comments>>