Iraq

Facing gantlet of hazards, rebuilders press on in Iraq

Security is mandatory. Insurance ranges from expensive to unattainable. But contracts are signed, and work is under way.

New contracts have been awarded, the pace of kidnappings has slowed and reconstruction is getting back on track.

But for Americans, Iraq remains the most dangerous place on Earth to work.

How dangerous? Workers' compensation insurance can be 20 times as high as in the United States. And for those repairing power lines and doing other high-risk jobs, life insurance premiums can run over $4,000 per week.

"The reality is, it's still a war zone," said Chris Beck of Clements International, a major provider of insurance services to expatriates worldwide.

The Bush administration's plans for rebuilding Iraq have been plagued by looting and sabotage ever since Saddam Hussein's regime fell 13 months ago. But work in many areas nearly ground to a halt in April after four U.S. contractors were mutilated in Fallujah, dozens of foreigners were kidnapped and battles erupted between coalition troops and Shiite rebels in Najaf, Karbala and other cities.

At the peak of the violence, authorities estimated that as many as 30 percent of U.S. contract employees had left Iraq at least temporarily. Most of those who remained were in "lockdown" - confined to their living quarters.

The situation has eased somewhat, according to the Iraq Program Management Office, which administers $18.4-billion in reconstruction funds approved by Congress last fall. The office has no figures on the number of U.S. employees in the country now, but says most of the 10,000 Iraqi workers are back on the job. Three-fourths stayed home in April because of safety concerns.

"All of our contractors are here and mobilized and work has begun," spokesman Jonathan Thompson said by phone from Baghdad. "We're seeing a pretty good ramp-up of projects - we're on schedule."

The office awarded 10 contracts totaling $5.1-billion in March, although at least one was held up after finalists were told to review their security plans in light of the escalating danger.

Odell International, based in Charlotte, N.C., expected to learn in early March if it would win a subcontract to rebuild hundreds of schools and hospitals. But president Rick Cantwell said Odell's bid "was a little more aggressive" than the program management office wanted.

"The government went to great lengths to make sure you understood the risk, and some of it was that they thought we'd understated the risk and that our costs reflected that," Cantwell said. "They wanted to make sure, for example, that when you move from Kuwait to Baghdad, you have a minimum of two vehicles and a minimum of two security (guards) per vehicle."

The company revised its bid, and on March 25 got the subcontract, part a project worth as much as $500-million to the prime contractor, Parsons Delaware Inc. Cantwell and colleagues immediately headed for Iraq, where "security has been excellent to date," he said.

For companies that have been in Iraq longer, dealing with the ever-present threat of violence has sometimes slowed or even stopped work.

In March, gunmen in Mosul killed a Canadian and a Briton guarding engineers for General Electric, which is rebuilding power and water systems. Like other contractors, GE won't discuss details, but acknowledges "there were delays in some of what we were involved in because of violence and resulting security measures," spokesman Gary Sheffer said.

"However, we continue to do work, we continue to complete projects for our customers and we continue to look for new opportunities to help in reconstruction for the long term."

In April, Fluor, a California company also helping to restore the power system, evacuated employees from one undisclosed site because of threats. It also "reduced travel as much as possible since that's where people tended to be most vulnerable," said spokesman Jerry Holloway.

At the end of April, about 20 percent of existing projects were "somewhat behind schedule, but not significantly," Holloway said. Fluor recently started three new projects that are still at the stage of determining what needs to be done.

In general, assessment teams have been able to move around the country, but "I know of a couple of locations where they have delayed visits because of security situations," Holloway said.

Fluor has not moved any of its 200 employees out of Iraq and "less than a handful" have exercised their option to go home. The company has been lucky in that most of its work thus far has been outside Fallujah and other areas "especially hard hit," Holloway said.

Less fortunate is Research Triangle Institute, a North Carolina organization that has projects throughout the country helping Iraqis learn to govern themselves. One RTI supervisor in Najaf was kidnapped April 5 and held for 12 days, at various times blindfolded, stuffed in a car trunk and given little to eat and drink.

"I thought I would die of suffocation in the car or that they would shoot me," Nabil Razuk, a Palestinian from Jerusalem, told the Israeli daily Haaretz after his release. "I was scared stiff."

Other RTI employees had to be evacuated from their quarters in Najaf and moved into coalition facilities for protection. More than 30 percent of RTI's expatriate staff, including Americans, left the country; some have yet to return, although the 3,000 Iraqi employees have continued to work.

"We get daily e-mails on their updates," says spokesman Patrick Gibbons. "That's really good news from our perspective because it's evidence that many projects we've gotten started on are taking root."

Under federal law, all U.S. contractors and subcontractors are required to provide workers compensation insurance for employees overseas. Iraq is so dangerous that premiums can reach $40 per $100 of payroll, compared to less than $1 per $100 for someone in a stateside office job.

Life and accident insurance are also enormously expensive, with the Sunni Triangle topping the list of risky places. Some cities, including Najaf, are currently uninsurable because of fighting.

Baghdad "sort of falls in the middle," said Beck of Clements International. The capital has been the site of numerous bombings, but coalition employees and contractors living in the heavily fortified Green Zone are considered relatively safe.

In general, premiums depend "very much on what you're doing and what your security situation is," Beck said. "If you're in the Green Zone and when you move about you have a driver and armed security, that would be the most ideal situation. The highest risk is where you're traveling by helicopter and repairing power lines."

Although rates have been steep all along, Beck said they dropped somewhat between January and April before soaring again last month to more than $4,000 a week in certain cases. And "based on what we're seeing and reading, I would not expect that the rates would come down any time soon," he said.

For the first time, too, some clients are withdrawing employees or canceling plans to send staff to Iraq. "Not in large numbers," Beck said, "but prior to that we hadn't seen any contractors pull out."

Iraq's workplace dangers threaten not only employees and projects, but also the very goals the United States has set for itself in Iraq, one expert says.

Iraqis feel that any country that destroyed Hussein's regime in just a few weeks "can surely get the lights working," says Jon Alterman, director of the Middle East Program at the Center for Strategic and International Studies.

"And if the lights aren't working and there's no clean water, then it can't be because of American inadequacy - it must be because of American intentions to punish people and because the United States wants continued security problems as a rationale to continue its occupation. That is a difficult environment in which to get people to sign up with you."

- Susan Taylor Martin can be contacted at susan@sptimes.com

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