Iraq unable to reconstruct Kirkuk pipeline

Two years and 82 million dollars have not sufficed to rebuild a 50km pipeline and it is not even clear where the money went. Billions of dollars have been lost at a time when the Iraqi people face shortages of just about everything.  

Baghdad (AsiaNews/Agencies) – The sum of 82 million US dollars was not enough to reconstruct a 50km pipeline to link Kirkuk's oil field to a refinery in Baiji.

The Iraqi government desperately needs to sell oil and get money for public expenditure. But works on the pipeline are incomplete and so far have been undertaken in a haphazard manner, and it is not clear how the money, disbursed by the coalition force's Development Fund for Iraq, was spent.

The project was entrusted to Kellogg, Brown and Root, a Halliburton subsidiary, but this firm did not give clear estimates of works completed: in March 2004, it said 1.8 million dollars worth of work had been carried out, a sum scaled down to less than one million in June 2004. One thing for certain is that the firm subcontracted out much of the project to Iraq's State Company for Oil Projects, a company experts have described as "inexperienced".

What's more, three places of the pipeline where canals intersected were originally to be done by Kellogg, Brown and Root, but now its contract has terminated and Parsons Iraq Joint Venture(PIJV) have taken over the task instead.         

Reconstruction has also been hindered by violence. A report from the Office of the Special Inspector-General for Iraq Reconstruction said: "According to PIJV, four separate subcontractors have refused to complete the remaining canal crossings [of the pipeline] because of threats and kidnappings."

Work finalized so far does not appear to be of state-of the-art quality. The report continued: "The entire pipeline project does not meet the necessary requisites and at least 25% of the welds joining sections of pipeline are flawed. Lastly, it could not be determined how much of the pipeline was completed since inspections of works could not be undertaken because of insecurity in the area."

The project should have been completed by 31 March 2004 to bring billions of dollars of income for the government each year. But the pipeline is now yielding 500,000 barrels of crude per day instead of the predicted 800,000.

 "Revenue potential of approximately US.8 billion has been lost to the Iraqi government due to the unavailability of increased capacity for moving oil," the report said.

• iraq
• kirkuk
• economy
• terrorism
• oil
• pipeline
• reconstruction
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• allocation