On the last day of October, Bechtel Corp.’s three-year, $3.2-billion contracts to reconstruct critical infrastructure in Iraq expires. The company’s few remaining personnel in Iraq are closing out operations and turning over operation and maintenance duties to Iraqis. A handful of executives who played key roles in Bechtel’s Iraq Reconstruction Project sat down with ENR editors in New York to break the their self-imposed silence on projects, discuss Bechtel’s performance and share critical lessons learned.
Until now, Bechtel executives have largely remained silent on their work and the conditions in Iraq. The debriefing in New York City on Oct. 18 included Cliff G. Mumm, president of Bechtel Infrastructure Corp.; Michael Dodson, chief program manager; Donna Bonghi, manager of human resources on the project; and Drew Slaton, an onsite communications manager for the past year. Bonghi flew in from Kuwait for the debriefing. All had worked a year, and some considerably longer, for Bechtel in Iraq.
Mumm explained the firm’s prior silence: “Because of security and the general instability in the country we really took a very tight-lipped approach.” He said it was driven to keep projects, and people secure. “We just really didn’t talk to the press, other than to occasionally defend ourselves,” said Mumm.
"What the Iraqi work force has to endure to come to work every day is something that you can't begin to imagine."
— Donna Bonghi, Human Resources Manager
The story they told was one of pride of accomplishment, commitment, frustration, depression, patriotism and loss.
“We don’t like to talk about this a lot because we don’t want it to become a statistic, and we know those that we lost and we’re pretty emotional about it,” said Mumm. “In total there were 101 casualties associated with our work, and of those, 52 died,” he said. Casualties included security people, subcontractors and Iraqi employees. “We had a large number kidnapped,” Mumm said.
The burden of security grew dramatically heavier after the company won its first bid in the spring of 2003. Mumm said one of his abiding frustrations is that it has been almost impossible to erase the perception that the company’s contracts were awarded without competition.
“We were chosen both times as the best qualified and best technically qualified and the lowest cost. That was a normal basis but maybe it makes it a little less interesting that people actually competed for this, than if something kind of strange happened,” said Mumm.
Bechtel’s first task was to scope the needs for infrastructure repair around the country, which had fallen into a lull between invasion and insurgency. The first contract authorized $680 million. “With that money, we were asked to cover the waterfront on infrastructure, but with a particular emphasis in the early days on reconstructing war damage and providing humanitarian relief,” said Mumm. “Ultimately, with Phase II awards and additions, mission creep took the assignment much further as popular demand for utility services increased and political pressures grew on the coalition and the Iraqi government to satisfy the people. ”
Photo: Bechtel Corp.
The contractor struggled to impose its standards on a work force isolated for decades.
Bechtel is leaving with 97 of 99 projects completed. Bechtel turned over the two unfinished jobs—a Sadr City water treatment plant and a children’s hospital in Basra—to the client, the U.S. Agency for International Development, and the U.S. Army Corps of Engineers’ Gulf Regional Division to restart and complete when conditions improve.
Dodson said that projects that do not finish with the rest of the program can become a burden for both contractor and customer whenever security issues made finishing them a near impossibility.
“We have the Sadr City plant at 88%, but the conditions got so bad that managers fled and then sub-managers fled, so there was really no way to do the kind of work you have to do to ensure that you have a good product,” Dodson said. Bechtel recommended that the client bring the projects to an orderly holding point and let them “sit until you have the conditions right, and then start again.”
"They took people and systematically executed them That was, 24 dead people just trying to get the civil work done."
— Cliff Mumm, Infrastructure President
The Basra children’s hospital is the most extreme situation. “In the beginning, our site security guy was assassinated, and our site manager was chased off with a death threat,” Mumm said. “Then the site engineer’s daughter was kidnapped and he was told to get out of there or she was dead. He left. Then they took 12 people from our electric/ mechanical contractor and systematically executed them. And then one day—and this is ‘Mafia,’ you just don’t really know why this stuff happens—11 people were marched out from our concrete supplier and stood out in front of a building and executed. That was 24 dead people, just trying to get the civil work done.”
Mumm added, “The question has to be answered, how much blood and how much money is that 96-bed hospital worth? There’s already 24 dead people right around that thing. So we get intolerably sensitive about the risk we took with our people to get that thing stabilized and in a position where it’s not lootable.”
Bechtel is finding jobs for many of its Iraqi workers on other projects outside the country. They’ve earned it, Bonghi said. “What they have to endure to come to work every day is something you can’t begin to imagine, because of the risk for their safety and security and for their families as well,” she added.
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Insurgents frequently destroy power lines.
In the early days of the project, Iraq was a safe and welcoming place. “We went everywhere,” Mumm said. “We looked at every railroad station, power station, water treatment plant, sewage treatment plant.” The company estimated that it would cost a little over $15 billion to bring the infrastructure to a functional level, by regional standards. Mumm now thinks the mission will take 20 years. “Against that we had $680 million. We had to very carefully pick and choose what we would do,” he added.
The company’s first priorities, including reopening the port of Um Qsar, were guided by instructions to create a platform for immediate humanitarian relief and also for the Iraqis to use later.
Mumm said Bechtel made several decisions about entering into the project. One of them was that USAID would be its sole client, which he said avoided a lot of confusion. Bechtel also thought USAID’s infrastructure restoration mission was a good fit. “ We wanted the program to make sense and have something to say about what that program was,” he said.
Bechtel also decided not to mix funding streams. “We would only work with USAID funds authorized by Congress, and that’s exactly what we’ve done,” Mumm said.
"There are tests: Is the power coming out of the plant? Is it reliable power? Is the water clean? Is the water treatment plant operational?"
— Mike Dodson, Program Manager
A constant question is whether the Iraqi people they are better off now than under Saddam Hussein’s regime. “There are a couple of tests,” Dodson said. “Is the power coming out of the plant? Is it reliable power? Is there water coming out? Is the water clean? Is your waste treatment plant operational, or is it in bypass, and how many people do you serve?
Dodson said Bechtel’s metrics show “about 7 million [people] in water, about 7 or 8 million in wastewater, and you say, ‘that’s a lot of people,’ but there are 23 million people in Iraq. But this is around Baghdad where conditions were pretty bad. A lot of people never had any clean water. So the metric really, in the water case, is how many cubic meters are coming out, and it is clean.”
Mumm said the contractor’s role changed as U.S. policy changed. “It started out [that] the reconstruction was to fix up any war damage and to provide humanitarian relief,” he explained. “Then reconstruction became, ‘Build a platform upon which the Iraqis can go forward in a stable environment.’ And then suddenly it just sort of moved seamlessly to, ‘Provide electricity to all the houses, make kitchens work, things like that.’ And people went around and said, ‘Well I can’t get power to my house. I can’t do this, I can’t do that.’” Bechtel got the powerplants running and reconfigured the grid, but the municipality hooks up houses, said Mumm. “That’s more a failing of the ministries themselves,” he said.
Mumm thinks water is the best example. “You have a limited amount of money,” he said. “We spent about $500 million in the end between the contracts on water, but in the early days, we had a limited amount. When we got to Iraq there was a mass panic about cholera in the south. The Sweetwater Canal was full of sewage, all the raw sewage in Baghdad. No Iraqis knew that their sewage treatment wasn’t working and that it was all bypassed right to the river. That had been done for years. We think it was done intentionally by Saddam as kind of a campaign against the Shiia.”
Mumm explained that the sewage went down the Sweetwater Canal, which runs about 270 kilometers south of Baghdad. He said effluent formed “a sort of sewage delta,” where water was pumped out by two remaining pumps to provide the water supply for Basra. “As we said, if you take the sewage out in the north, then you’ll automatically clean the sewage in the south,” said Mumm.
The mostly Shiia population in the south derived benefits after years of persecution by Saddam’s regime. In addition to the reconfigured power grid, “the rural water program is just a fantastic success support,” said Slaton. “[For] villages of approximately 5,000 people or less the total capacity of the whole program was about 30,000 cu m per day. The target population to be serviced is almost 500,000 people, and these are people who never ever had clean drinking water.”
The main take-away for Bechtel is that “there’s a security element now that’s become part of our core business in many parts of the world,” said Mumm. “It was always there but it’s a larger issue and I guess what I would tell you is that we don’t outsource that. We manage that ourselves and we manage the program ourselves.” Mumm said the violence “hasn’t stopped interest in us doing work in other parts of the world, but we do consider very carefully the level of security or insecurity. It is troubling.”
He points to Basra as an example. The city was relatively secure in 2003, after Baghdad fell. Initial security costs were estimated at $13 million, but that jumped to $48 million as the situation there deteriorated.
Despite tremendous obstacles and violence, Bechtel managed to turn a profit on the Iraq reconstruction project. “We made a profit,” said Mumm. “We met our expectations.”
October 29, 2006
How gratifying to hear that Bechtel made a profit for their wartime ventures in Iraq. Let us hope that KBR, Halliburton & all other contractors who contributed heavily to Bush/Cheney/Republican Party all make a generous profit & come home safely. I am sure that it was in the national interest to have the select pool of "bidders" for these contracts to coincidentally be large contributors to the current administration & its hirelings. If only the margins looked so good for rebuilding the Gulf Coast, but that's a low priority next to the war on terrorism. These profiteers er patriots earned every dollar that they skimmed off the top I am sure.
Let's hope that the returning boys and girls in uniform enjoy such lucrative opportunities when they return if they are able.