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USAID Sectoral Consultations

Transcript: Electricity and Water Update Conference

MR. FREDERICKS: Good morning, everybody. I'm Joe Fredericks. I'm the Director of Public Information at the U.S. Agency for International Development, and I'd like to welcome you all today to the first of our second round of public consultations on our Iraq program.

As some of you may know, we did an initial series of nine public consultations in April and May, ending last week, that focused on our planning and our proposed activities on the ground for reconstruction in Iraq. This new session will be focusing on our activities and our results on the ground in Iraq and will include speakers, where possible, who have just returned from the field and will be speaking directly to their experiences and what we have accomplished.

Today, as you know, is on electricity and water. We have six other consultations scheduled for the month of June, ending on July 1, and I would note that one of those, on June 17th, is a pre-bid conference for interested contractors on our agricultural sector activities. The other ones are results-oriented, as I was mentioning, and are really not intended for contractors seeking to do business with the Agency but are, rather, focused on reporting our results to interested public. We certainly will not exclude contractors at all, but please understand that these consultations are meant for a broader audience, and now in this new series are focusing on our results.

If I have members of press in the audience, please hold your questions until after the session is over and allow the members of the public here to ask questions.

I would note that this is being webcast live via www.usaid.gov, and that streaming video will be archived and available on the site as well as a transcript of this conference.

Thank you very much. I'm going to turn it over to Dana Peterson with our Iraq Reconstruction Task Force with our Asia and Near East Bureau, and she will guide you from here.

Thank you.

We appreciate the interest of those of you here in learning more about USAID's reconstruction efforts in Iraq. As Joe highlighted, this is sort of the second in a series of public sector consultations. Our first series really highlighted our proposed approach, various objectives, assumptions, et cetera, in undertaking work in Iraq. What we are doing with this next series is to highlight where we are at with implementation 30 days, only really a month in, and to get feedback from you, to respond to questions you may have.

Again, this session today is focused on electricity and water, and I will turn it over to colleagues in just a moment to speak specifically to those sectors.

What I wanted to highlight is just reiterate a couple of points that Joe made, that in this session, again, we are focusing on our implementation efforts so far. We are not in a position to speak to broader administration policy issues nor specifics on USAID's procurement processes. This session is not intended to address those areas.

I can really say that the U.S. taxpayer, the American public, has much to be proud of in terms of what we have accomplished to date, and we really see these sessions as an opportunity to highlight the developments that have been occurring on the ground so far.

After we go through this next sort of series of public sector consultations, we will also look at the holistic picture. But at this point, given that we're 30 days in, we really are focusing on addressing the delivery of essential services, meeting basic needs, et cetera, and so are taking a sector-by-sector approach in the information that is being presented. But as we get--we further progress in implementation, we will be highlighting the holistic picture and how what's being undertaken in electricity, water/sanitation, let's say, relates to our work with local governments and the delivery of health services and other issues.

For those of you who have not had an opportunity to attend these sessions before, I would just like to highlight the four overarching objectives of USAID in the reconstruction sector.

One is to restore economically critical infrastructure, and that ranges from addressing critical transportation routes, power, electricity, water/sanitation services, rehabilitating health clinics, school facilities, public buildings, et cetera.

A second objective is to deliver--help assist in the delivery of essential services, particularly targeting health and education. And as Joe highlighted, we will be undertaking public sector consultations over the next couple of weeks on those sectors as well.

A third objective is to expand economic opportunities, and part of that is an agriculture program, which a request for proposals went out on May 29th. And we--actually, June 4th, excuse me. And we will be doing a pre-bid for that next week.

And then our last objective is to support accountable and effective local governance, and next Thursday we will be doing a public sector consultation on that as well.

In terms of just to give a context of what is unfolding in the field before we delve into the specific sectors, USAID has approximately 80 to 90 staff out in the field comprised of both humanitarian relief personnel as well as those focusing on reconstruction. The humanitarian relief personnel have been organized around a Disaster Assistance Response Team, a DART. You may have heard that phrase before. And we are actually hoping--oh, good, Bill arrived. One of the members of the DART will be able to speak to some of his experiences in the country.

Excuse me, Bill, please, if you wouldn't mind coming up.

And USAID is working very closely with the Office of the Coalition Provisional Authority headed by Ambassador Bremer, formerly known as ORHA, the Office of Reconstruction and Humanitarian Affairs. So USAID is integrated well in with that overall effort in OCPA, as it's called.

So, again, we very much appreciate you taking the time to learn more about our efforts in the country, and I would now like to introduce my colleagues.

Jim Guy is an engineering specialist with USAID working on our Iraq task force. Jim Bell is a water/sanitation specialist with USAID as well. And Bill Hagelman (ph) recently returned from the field where he was serving as the southern coordinator for the Disaster Assistance Response Team.

So I'd like to first turn it over to Jim Guy. Thank you very much. Oh, and just to highlight one other thing--sorry. Given that this is broadcast live on the Web, if questions--which hopefully they will--arise, you will need to come up to the microphone here so that those viewing this from afar can hear the exchange.

MR. GUY: Good morning. Thank you, Dana, and welcome to this second conference we have had here on our second round. This is the conference dedicated to water and power issues.

The first thing that ought to be mentioned is that when the U.S. began its mission in Iraq back in, I guess, March, we made a conscious effort not to destroy power infrastructure. And I think we--when we got into the field, we discovered that we had been very successful. There was very little damage caused by USA bombing activities in the field. More damage was done because of lack of maintenance over an extended period of time in Iraq. The equipment in the field was poorly to not maintained at all, since 1990, I guess, since the whole period of the difficulty of getting materials into Iraq. There was some damage to transmission systems from the bombing, typically in the southern sector of Iraq.

We have a handout prepared--and we'll have it to you before you leave--which goes through a chronology of the power sector in Iraq since before hostilities began. And I'll try not to repeat everything that's on that handout, but the essential elements are:

Prior to hostilities, there were approximately 5,500 megawatts in operation in Iraq. That includes both the northern, central, and the southern sectors.

There was little to no damage done to the northern sector, which all of you know was under the control of the Kurds, and they were protected and had UN involvement in their sector for the last seven or eight years. So nothing was required in the northern sector on the part of Bechtel or USAID.

There was a good bit of damage in the power sector in the Baghdad area, some of which caused by USA bombing, some by looting and sabotage by the local citizenry. Substations were ransacked, power stations were looted in many places, and it's taken a long time to get a handle on replacing the damage done by looters as opposed to damage done by USA bombing.

The power supply in Baghdad just after the conflict ended, I guess in mid-May, was about 1,200 megawatts remaining from the original 5,500. The present capacity in Baghdad--in Iraq in total is about 3,500 megawatts. We have a goal to get 4,400 megawatts by midsummer, which is the peak demand period for Iraq. We're doing that by repairing existing facilities, repairing transmission facilities, and we're also bringing in power from diesel generators to supplement those areas which cannot be repaired quickly.

We have brought in large diesels into the Baghdad Airport. We have brought in large diesels into the port of Umm Casr, which is the principal conduit into the country for shipment of large goods as well as food aid.

As of this morning, in Baghdad, they were getting power, 18 hours a day power on average for the citizenry. Last week, it was three hours on and three hours off. So we've basically doubled the power availability to the citizenry of Baghdad in the last week.

One thing the numbers tend to distort is the total demand in Baghdad last summer was 2,400 megawatts, approximately. Now, we weren't there to measure it, as you would understand that. We have to get it from anecdotal evidence. But that's what we think it was last summer. We hope to get back to almost 80 percent of that by the summer.

Having said that, that megawatt served industry as well as commercial as well as residential households. The industrial output of Baghdad is still very low, so most of the power now is going to the commercial and the domestic side. Very little power is going into the industrial sector because it is still largely not functional.

Let me talk about some of the issues that we've addressed there. One of the principal issues that has limited our ability to move power around was the damage to the 400 kv network south of Baghdad, between Baghdad and Basra. A number of the large towers were destroyed either from bombing or from sabotage. People would go in and actually tear the towers down by cutting--with a cutting torch. And once one falls, another one falls. It is a domino effect in the worst kind of way. So we have now taken to patrolling those lines with helicopters to prevent further damage, and that seems to have been successful on our part.

A serious problem we had, Bechtel had, was the lack of spare parts. Over the last ten years, nothing has been purchased for the T&D systems or the power stations in Iraq. So one of Bechtel's primary job was to replenish the stock of spare parts, and they've done that. We're creating warehouses all over Iraq to house those, and also putting them under armed guard, I might add. That's one of the biggest risks, is having things being looted. We buy then; the next day they're gone. We have to guard everything that's loose, or else it will be gone in the morning. We have armed guards, either private security or U.S. military, guarding the stocks.

An issue which USAID had very little input into was the fuel supply issues in Iraq. Here we have a country which has the second largest resources of oil in the world behind Saudi Arabia had a severe fuel shortage in the country. This is primarily resulting from the fact that refineries were not operating. Power plants use refined products, No. 6, No. 4, No. 2 fuel oil. So the refineries were not working, so we had no refined fuels.

We did burn crude in power stations initially because crude is available so we could do that. The refineries are not working because there's no power to the refineries, so we have the classic chicken-and-egg problem: getting power to the refineries so the refineries can make fuel for the power stations.

The refinery in the north was not damaged. The big one in Basra was damaged, as well as the Power (?) refinery. We have now gotten the refineries bootstrapped up. They're not fully producing yet.

What that has done to--the other fuel supply component is natural gas. Natural gas in southern Iraq particularly is coproduced with oil. So if you're not drilling oil, not exporting oil, you're not getting gas either. And a lot of the stations in Iraq only burn natural gas, so we've had to start pumping oil somehow so we can get natural gas to flow, so we can compress the gas lines to feed the power stations.

This network is very integrated. It's not just a single project. Everything relies on other things to make it work.

Let me just show a few things that Bechtel is doing specifically or has done. Some of the things you would only know about if you were in the business, but the things that are necessary for power stations to work:

Chemicals are required to treat feedwater. There were none in Iraq, so we had to bring in all the chemicals to treat the water to provide feedstock to the plants.

We are supplying power to the grain silos in Umm Casr with diesel generations.

We have a large inventory of spare parts and transmission systems. We've rented 20 diesel generators for locations throughout Iraq at critical service points.

We have completed the assessment of all the power stations in Baghdad and are now working in the Basra area in southern Iraq.

All in all, I would say that we've had a lot of success, Bechtel has; not as much as we'd like to report today, but I think the momentum is gaining. And once security issues are more resolved in Iraq, I think you'll see more rapid successes.

But having said that, we have to give a lot of credit to the Iraqi Electricity Commission. They have been extremely useful in supporting Bechtel. In fact, most of the repairs are done--that they're doing, we're supplying them the equipment and the spare parts, but they're doing the work. And they have been extremely responsive in trying to get their country back on its feet, and we owe them a lot of credit. I think we didn't know what we'd find when we got there, but we found that they've been very instrumental in getting the power supply back in Iraq.

That's all I have. We'll save our questions until later, maybe, so we don't take all our time on my questions. So I'll introduce Jim Bell now.

MR. BELL: Good morning to everybody. It's a pleasure to have you all here with us today, and I hope that you'll find this sectoral briefing, not only on the power but also the water and sanitation sector, as useful. And we're also here to get your input in terms of our presentation and your experience and any thoughts and suggestions that you might have, as well to answer your questions.

In terms of presenting on the water and sanitation sector, what I'd like to do is really break it up into two different parts. They are related, but we find, I think just as with the power sector, that we have the immediate relief and emergency needs that have faced the teams, the USAID teams that have gone out there. And for that purpose, we've had what's called the Disaster Assistance Response Teams, about 65 people that were sent out to the field prior to and certainly at the beginning of the opportunity to get into Iraq to begin to develop emergency relief activities.

In that regard, we're very fortunate to have with us today Bill Hagelman, who was the coordinator for the southern area for the Disaster Response Team, and, frankly, Bill has some, I think, very good experience that I don't have, I think, in terms of having been out in the field. And, Bill, I hope that you'll feel comfortable as we move through, and if there are questions that are particularly related to any water/sanitation issues on an emergency basis or even his experience in terms of how do you get some of these activities up going, I hope, Bill, that you would feel comfortable to answer those.

Also, we'd like to look at the longer-term restoration activities, reconstruction activities that both Jim and I are working on, I think, primarily for the water and sanitation sector through the Bechtel contract, which, as you know, is the large infrastructure contract that includes certainly the power sector, water sector, bridges, transportation, and I think many of the other areas that more than likely many of you all are familiar with.

It also includes a grant agreement that we have with UNICEF in the area of water and sanitation. I probably also could reference for you that we have a website that all of you all can go to if you're interested just in general information on our reconstruction activities. That would be www.usaid.iraq--excuse me--gov.iraq. That's a very good place. There are also other websites. UNICEF has a website. There's also another one called A Good Place to Start that has very good information, up-to-date information, and it's a website that the public can access, and that would be www.agoodplacetostart.com, and that one's being operated by the Humanitarian Information Center, if I've pronounced it correctly, Dana.

But you'll find a lot of good information there, not only on the water sector but on many of the activities that the international community is involved in, some of their assessments, just a good place for a lot of different types of information. And I would encourage you if you're interested in knowing what's going on in a general sense in Iraq to please check that.

As I mentioned, I would like to present to you, I think, on some of the--just briefly some of the--an overview of the water and sanitation activities, both from a relief and emergency perspective, and then also some of the activities that we're working with in a longer-term basis. And I'm just going to--we have a handout for each of you all, and I'm just going to refer to this, as I think I'm going to use that to document what I will present on.

Recently, CARE and UNICEF have done an assessment or an evaluation on the water and sanitation sector in 14 governates in central and southern Iraq. That assessment was--they went to about 177 different water treatment plants, and the results of that were that 19, approximately 19 percent, or one-fifth, were classified as being in good state of operation, in proper repair, and were operating on a normal basis. There were 55 systems--55 percent that were classified as acceptable and 25 percent were classified as poor.

I would like to point out that many of these systems in these categories, the results of that were really based on the operations and maintenance of these systems prior to the outbreak of hostilities earlier this year. We've seen from different reports that over the decade of the 1990s that the budget for operating water treatment plants and sewage treatment plants did decline precipitously. There were a number of issues in the sector that were the result of that. In general, there was a lack of spare parts, lack of machinery, lack of just funds to keep the distribution systems operational, probably a lack of money to keep the systems treated with using the chlorine that was needed on a regular basis, probably some of the other chemicals that are used in sedimentation, aluminum sulfate being one, among others.

So I think in general we've seen that the systems over the decade were in a steady decline in terms of the performance, operating efficiencies. We also see that there was a precipitous decline in the number of staff that were working in this sector within the water authorities throughout the country. I think the original statistics gave about 20,000 employees at the beginning of the decade of the 1990s, and towards the end I think there were about 10,000 employees.

We also saw that there were a lack of tanker trucks for excavating waste, solid waste as well as those systems that are on sewage systems. I think originally there were about 800 trucks that were used for tankering waste. And toward the end I think there were about maybe 300 trucks that were left.

So the private sector did come in, in some extent, I think, to begin to take--you know, to address some of these problems, not only for sanitation but also for bringing in tankered water in cistern-type trucks.

In the northern part of the country, we have not seen that the needs are that great. I'm sure there are needs up there. I'm sure that some of you are probably more expert on that part of the country than I am, and so I just ask you to bear with me. But we found up there that there was some differences because of the terrain and geography and hydrogeology in those regions as opposed to the southern and the central regions, which are flatter and also where they were using--they were pulling more water from the Tigris and the Euphrates Rivers in the central and the southern zone, whereas up in the northern zone they could pull water from the gravity water systems, also drilling wells.

Water quality was not as large a problem. We've had in the southern and the central region as well water quality problems, salinity and also the discharge from the treatment plants, the sewage treatment plants that are not operational.

I've seen statistics that overall in the country, if I'm correct about--estimates range from approximately 500,000 cubic meters of untreated sewage a day for the country and about approximately 300,000 cubic meters of untreated sewage goes into, I think, the Tigris from just the city of Baghdad.

So there are a number of issues in this sector, and part of them are also related to the power sector. Most of these water treatment plants and sewage treatment plants are on the electric grid. Some of them do have backup power generators. In the case where the backup power generators do exist, there are problems with the spare parts. There's problems with having the technicians to operate them. There's been problems with not having a steady supply of fuel.

So, in general, you can see that there are many challenges that are facing the reconstruction efforts in Iraq, in particularly the southern and the central regions. Another would be just the issues of having the personnel from the ministries or from the water authorities to come back to the work, and I understand that they are coming back, and we'd certainly like to acknowledge the work that they're doing in collaboration with Bechtel and also in collaboration with UNICEF and collaboration with the international nongovernmental organizational community that's been a very key player in these beginning efforts, particularly in the relief and the reconstruction activities.

Also, I think, with the power grid being down and many of these being locked into that, I think as we see increases in the provision of electricity, we will see, if you will, just a direct relationship to the function of these power plants that are used--these power-generating units that are being used to pump intakes from the rivers or whatever sources. Probably some of them are also some deep wells that are using as well. So it's not only ground water, it's surface water that is being used for supplying water to many of the areas.

UNICEF has also had--and there has been a very active, during the decade of the 1990s, rural water supply program. And at one time I think there was good coverage, particularly when you look at Baghdad as a country with--you know, comparing it statistically to other countries in regions of the world, I think that there was good coverage; particularly in the potable water supply area it was quite high. And certainly USAID wants to do all that it can, I think, to bring these systems back to more than just being operational. I think we want to be sure that they are providing what generally is considered to be reliable water supply that is also potable, free of pathogens on a regular basis, and we're working towards that. That's certainly one of our efforts and one of our goals.

I would also like to give you some just very brief successes, and this list certainly is not all-inclusive by any means. I think it's just more than anything else illustrative. And I think before I do that, I'd also like to acknowledge, again, as I mentioned earlier, the work that--our colleagues that are in Iraq are major players in this activity, and I've seen information particularly from Baghdad and also from Basra where the water authorities, the staff have been working very hard. I think there are many of their staff out there that certainly are very well--highly qualified, and they're working hand in hand with our teams, both in a relief and emergency basis, but also in the longer-term efforts of reconstruction.

We're all very, very anxious, I think, to see these systems get back up to operational efficiencies as soon as possible, and I can assure you that the teams that are out there, both the USAID staff and the contractors as well as the local counterparts within the different government agencies, are also working as fast as they can to get these systems operational.

Please bear with me, and I'm just going to go through a list of some of the activities that are being accomplished or have been accomplished, and I'm also hoping later that, again, if there will be some questions, I look forward to your questions.

One important activity that has been undertaken, and this is, generally in most countries UNICEF plays a lead role in the water and sanitation sector. They have a unit in New York City that's a water and environmental sanitation unit that provides technical backstopping to the field operations. We work with them. We're funding UNICEF in water and sanitation activities through a grant agreement. We're also funding UNICEF in the health sector, and we also have a funding mechanism with UNICEF--excuse me, with WHO.

I'm mentioning UNICEF and WHO in that regard because obviously in the water/sanitation sector, that has a very close correlation to the health sector. And what we can see is obviously the benefits in terms of potable water, and we can monitor that, I think partly through just looking at the incidence of diseases: diarrhea, typhoid, many of the other communicable diseases. When we see that the rates are low, then generally that's a good indication that the water systems are--that people have access to safe water.

That also is true for the sanitation systems, as many diseases are vector-related, and I'm getting a message here, and also, Bill, hopefully you'll be able to speak.

Briefly, UNICEF has set up a coordinating unit that has invited--and they do this on a weekly basis with the UN System, the organizations, with the NGOs, with USAID, and Bechtel. Some site assessments are being undertaken around the Basra region by UNICEF, and the purpose there is to look at the water quality. The Government of Kuwait has generously made available or donated some water desalinization units, and I think they're studying if that would be a proper placement of those units in the Basra area. They're based on reverse osmosis systems, so I think that one has to be careful about the turbidity and I think other technical issues in there, whether or not they're used.

With OFDA funding, CARE has undertaken emergency water rehabilitation in Qaim and al-Rutbah, in the (?) that's benefiting approximately 80,000 persons. OFDA funding has also provided money to Save The Children that has provided some submersible pumps to maintain treatment plants in the Raf-(?) water treatment and pumping station. Approximately 500,000 people, persons are benefiting from those systems. Save The Children is also reviewing--this is again with OFDA funding, Office of Foreign Disaster Assistance funding--looking at some primary health care facilities in the al-Basra governate, and some of those systems will--we anticipate also improving the water/sanitation systems.

Bechtel has some preliminary estimates of repairing water treatment plants in eastern Baghdad, the city proper, that would increase water treated by 45 percent. Bechtel is also developing rehabilitation plants for water treatment facilities in the Basra region and also rehabilitating wastewater treatment plants in south and central Iraq.

UNICEF has also purchased through funding from USAID chlorine gas, bleaching powders, chlorinators, water purification tablets, and aluminum sulfate, just different chemicals that are used in the water treatment process.

Numerous hospital and public health clinic potable water and sanitation systems have been repaired by the NGO community through USAID funding. And literally millions and millions of liters of potable water have been provided by tankered truck to the occupation--excuse me, to the Iraqi population over the last couple of months. UNICEF estimates, I think, right now they're trucking--they're using about 100 water cistern trucks to bring in potable water to the southern populations, and city water authorities, Baghdad Water Authority and Basra Water Authority, have been engaged by USAID's partners to access current water and sewage systems and provide information and input to plants for rehabilitating those municipal systems.

Bill, would you like to come up and perhaps give an overview of some of your activities as they relate to the water and power sectors, if you will, please?

Thank you very much.

MR. HAGELMAN: Hi. I'm Bill Hagelman. The good news is I'm not a technical specialist, so I can't give you any hard facts. I can essentially paint a picture for you of what it was like out there. And I was struck particularly while they were giving you a feel for the ten years of neglect between the first Gulf War and the hostilities of this past spring.

You have to compare that to the fact that a presidential palace was constructed in Basra during that exact same time. We're talking about a presidential palace that was constructed completely out of marble. We're talking about a presidential palace that stretched over a number of acres right along the Shatt al-Arab. We're not talking as though the former regime didn't have funding to provide its people with clean water. We're talking about government policy decisions as to how the resources that they had available to them were actually utilized. And there is a great deal of rejoicing in places like Basra, Umm Casr, Nasiriyah, Amarah, and al-Kut, the four governates that our team visited and assessed, that indeed the former regime is gone, because I think people are looking forward to the fact that they can play a stronger role in their communities.

One of the key things that the DART actually was impressed by was working with the local civil affair groups that were still there to encourage local community leaders to come forward and to set up working town councils and technical advisory committees. It was through those committees that we were able to actually identify, prioritize, and track the most urgent requirements that needed to happen.

Let me be clear. I'm only talking about the water/sanitation field because the DART did not deal with electricity. But on the water/sanitation side, it was very clear a lot of what was needed were very small interventions in order for the water to flow again. And it was key to have that local participation and to encourage that local governance sector involvement in everything that we were doing, particularly in the water/sanitation sector.

I cannot emphasize enough the point that was made in terms of the work that the local Iraqi water engineers did. They were absolutely invaluable in terms of working with the DART, with the local civil affair groups, with the UN agencies, in order to help us understand the systems that were in place. I cannot emphasize enough the point of how centralized everything is and how linked everything was in trying to figure out how you get it back up going again so that, A, we didn't start all over from scratch, and the people themselves were again empowered.

That was particularly true when there was a cholera outbreak in Basra. The linkage between health and water was already noted.

Just by finding where the stocks of chlorine tablets were available was important to get chlorination back into the water supply that was piped through the city of Basra. There was a great deal of discussion back and forth as to whether or not there should be distribution of bleach to individual households or whether or not they should just focus on the central water supply, recognizing that ultimately it's going to be a lot faster if they could chlorinate the water that was being piped.

In Umm Casr, the very first area that we were allowed into after troops moved on farther north, the Government of Kuwait had offered clean water to the people of Umm Casr, a sleepy little port town in southern Iraq that was as far removed of the glitz and glamour of Kuwait City as you possibly could be, a very, very poor, neglected town that was obviously a victim of the fact it was a no-fly zone and that it was an area that the Saddam regime ignored.

When they were brought in this water from Kuwait, the people rejected it at first because it was so clean, they'd never tasted anything like it. It was so good for them--it had been chlorinated and everything--that it took a while for them to understand just exactly what this water was.

It also took us a while just to understand that there had been two completely different water systems in place. One was the wash water that came down from a pipe from Basra, and the other one was the potable water, which was trucked either all the way from Baghdad or from Basra, and how the potable water was actually distributed versus how the wash water was distributed.

In other words, it was never as simple as it appeared on the surface, but thanks to local participation, thanks to the water engineers that would come forward and work with us, we were able to piece together systems and to put together emergency responses.

Another issue that's been touched upon is true. Security is an incredible problem, and it's taken a while, I think, for all of us to understand what security has meant in Iraq, just given the fact that security was not just the police. It was four or five different levels of security that existed, and, of course, all of those levels of security are not being replaced.

So a lot of the problems that we have encountered were not urgent, life-threatening humanitarian needs as a result of the war that was fought; rather, a good deal of it has been dealing with the looting that has broken out until security can be properly brought back under control to assure that once something is fixed it stays fixed.

Or, more importantly, as was the case in Nasiriyah, when they finally got the electrical grid up and running, the residents were so excited by the news that the celebratory--the celebrations included firing their guns into the air, which immediately knocked out the power grid all over again, and it was back down for another week.

But, by and large, you understand the issues of looting and security when the temperatures were a toasty 108 degrees and you have no water. You do understand why people are digging up the water pipes and breaking into the water supply system, even though in the long run it works against them. There is no long run for their money at this point. It's the short term, their needs today in terms of how do they get water.

Again, it comes back to the fact of the abuse prevention program that USAID has also put into place. Abuse prevention also indicating that some people were discriminated against and didn't actually get goods and services. Some places didn't get water. Some places didn't get electricity. And so if you were in one of those neighborhoods that had been discriminated against in the past, just having the water system or the electrical system up and running wasn't good enough for you because you weren't getting--you hadn't gotten it in the first place. And so you were more likely to be out there looking for how you could get access to water and electricity. And those are issues that need to be addressed in the longer-term development efforts of the USAID mission out there.

I think that that pretty much sums up just the anecdotes, the bullets that I wanted to share with you from the water perspective. Thank you.

MS. PETERSON: Okay. We would like to open it up to questions and comments. I just wanted to clarify a couple of points in terms of the Internet addresses that Jim referred to.

The USAID website is www.usaid.gov/iraq for information, our daily public fact sheets, et cetera. And then for A Good Place to Start, I believe it is .org versus .com, but that will become apparent to you as soon as you try to log in.

So, anyway, a question, please. Again, we'll need to use the microphone so that others can hear from afar. Please?

MS. DREEDY: Yes, good morning. I'm Barbara Dreedy (ph), the Director of the American Kurdish Center in Fairfax, Virginia, and I'm working together with people who are very well-trained professionals who immigrated to the United States in the last 10 or 20 years. They're very anxious to be able to contribute to the rebuilding process, but I'm wondering how much more work can NGOs do, because it sounds like it's pretty well organized at this point by UNICEF and the larger international NGOs and Bechtel. So what role can we play?

MS. PETERSON: Okay. Just to clarify, the interest is in looking at an organization as a whole or individuals within that organization?

MS. DREEDY: Both. Facilitate coordination [inaudible].

MS. PETERSON: Okay. The answer was both, to look at facilitation with Iraqis in-country and both from an individual perspective and organizational.

I'd like to turn to Bill Hagelman to address some of the immediate humanitarian relief needs and what opportunities there may be. But what we have highlighted in these public sector consultations is that organizations who are interested in becoming engaged, a valuable avenue would be to look at our prime contractors who will be undertaking sub-relationships as implementation moves forward and as rapid assessments are undertaken and there's clarification on needs, et cetera. And on our Web page, we do list all of our implementing partners, so that is one avenue.

But, Bill, would you be able to address--

MR. HAGELMAN: One of the things that I didn't mention was that on the DART team, we had four members who had worked with us on the DART team when there had been an DART up in the north previously. That DART team closed down in 1996, and with the completion of that DART team, all of our DART members from northern Iraq were actually taken from Iraq and allowed to resettle in the United States.

Out of that group, four of them joined us in Iraq and were absolutely incredible resources, not only in translating for us but in helping us understand why things were the way they were and helping us compare today versus what might have been the situation back in March. And I should never forget to give them credit for the incredible contributions that they have made. Three of them were Kurdish, one of them was Arab.

But more to your point, OFDA has cooperative agreements with six major U.S. PVOs that continue to work throughout the country, and all of those cooperative agreements allow for interventions specifically in the water/sanitation sector as well as food security, health and nutrition, and I think there's one other sector that's addressed by those cooperative agreements.

Those cooperative agreements will be running, I believe, for another year or so, and so I believe that there is still very much a role for the non-governmental organizations that are working with OFDA funding.

MS. PETERSON: I guess one other thing to just highlight is, as, again, needs are further identified and as additional countries contribute and engage in reconstruction efforts, there would possibly be other avenues beyond the U.S. Government as we look at a broader effort there, too. Thank you.

MR. Ali Karaguli: Construction. Really, my major point is I'm seeing a lot of work being done and is going to be done, but I don't see the tools to let the private sector of Iraq to participate and provide jobs for the Iraqis. USAID and Bechtel said they encourage to employ Iraqis, but I don't see any really thing to really implement that. And I think that's very important because there's a lot of Iraqis who can really be a help and provide jobs.

Thank you.

MS. PETERSON: Okay. I will turn this comment--thank you for that feedback--turn that over to Jim Guy for more detailed information. But I can say that Bechtel has issued subcontracts to Iraqi firms to undertake repair of bridges and some other endeavors, which Jim can speak to. There is a priority to look at Iraqi labor, and there will be a conference, as I understand, in Iraq on June 18th to bring together various Iraqi firms to sort of conduct a conference similar to what Bechtel did here in the U.S., actually, and then in London. But they will be doing one in Iraq to reach out to as broad of an array of interested stakeholders in-country as well to help with the implementation.

But, Jim, would you like to elaborate, please?

MR. GUY: Bechtel has issued two contracts in Iraq: one to build a bridge bypass on the road between Baghdad and Amman. They're about to issue a second contract to an Iraqi firm to do work at the port of Umm Casr. Bechtel is there doing the major repairs at the grain silos and the roads. This contract should be issued today or tomorrow to the Iraqi company.

Iraq has made it clear to companies in the region if they want to work in Iraq, they should partner with an Iraqi company as a partner, because their intention is to use Iraqi firms as much as possible and hire Iraqi labor directly as needed. So Bechtel is clear on their intent, use Iraqi companies for work in Iraq.

They've just begun so it's hard to say how much will be done, but they've just begun that process.

MR. BORESH: I'm Matthew Boresh (ph) with Deloitte & Touche. I realize that over the coming months the emphasis is on bringing the systems back into operation in power and water. But there's been news reports that over the next year or so there's going to be increasing emphasis on privatization, on trying to attract private investment into the infrastructure sectors, to move beyond just the repair stage to actually building new infrastructure, upgrading the systems and so forth. And I was wondering if any of you could speak to this longer-term plan.

I mean, in the news reports it says that the talk of privatization was thought to be a couple years into the future. Now it's being advanced much more quickly with talks of privatization initiatives actually beginning within the next year or so. And this was, you know, focusing specifically on power and water infrastructure in particular.

MS. PETERSON: This session today has been primarily to focus on, again, implementation efforts to date and the sort of 30-day time frame in which we have been implementing.

In terms of the privatization, that is--there are numerous discussions on that, Department of Treasury, State, USAID, and other governments, et cetera. And we're not really in a position to speak to anything specific along those lines at this point or in this forum.

MR. BAYH: My name's Austin Bayh (ph). I'm with Bayh Commercial. We are based out of the United Arab Emirates, and we have an--our U.S. office is in Dallas, Texas. We supply hydroelectrical construction and maintenance equipment.

My question is: Is there a standard technology that is prevalent in Iraq for water treatment? And if not, is there a move to standardize on some certain technology to do that?

MS. PETERSON: Okay. Jim?

MR. GUY: Thank you for your question. I will give you the best answer I can.

I think that we're just beginning the process, particularly with the big city water urban treatment systems, to look at the issues of how best to rehabilitate it and in an cost-effective manner and as quickly as possible.

My understanding in Iraq is that the water quality, in terms of dissolved solids, in terms of turbidity, there is certainly--and also in terms of pathogens, there are quite a number of different issues, probably even some industrial pollution. I know there's agricultural pollution. So that I think there are a number of issues in the water quality sector. In the south as well, I understand that salinity, high salt content, is more of a problem than it is in other regions of the country.

So I think probably the best answer to your question is that we anticipate that the solutions for addressing water quality will be based on the results of the studies that are currently being undertaken in terms of looking at what is the--you know, what is it going to take to make sure that the water is potable water, that it's safe and clean to drink.

I think at this time it's a little too early to say that we're going to be doing one intervention in one part of the country. We know in general, I think, what some of the issues are, though, but I think it's still--we'll have to see what the results from these assessments and the evaluations give us and recommend, even in terms of technologies.

Thank you.

MR. BUTTERFIELD: My name's Ian Butterfield. I represent Balfa(ph) BT, a British heavy soil engineering company.

MS. PETERSON: Jim?

MR. GUY: I don't think that has been entertained. They're still trying to repair what's on the ground. I think trying to rebuild the system was not the initial goal. It was to get the power back on with the existing system as much as possible, and those towers still on the ground in southern Iraq have been repaired.

MR. GILLEN: Good morning. I'm Kevin Gillen (ph) with Dominion Post. Jim and Jim, you mentioned and praised and thanked the Iraqi folks on the electric side and the water side. Bill, maybe you can answer this question. Are those folks--is there a payroll for them to keep them coming back, if you will? Is there--you know, what's--where--you know, is there a plan already in process? Are they being paid? Is there a long--short-term, long-term, like keeping these folks coming back?

MS. PETERSON: There are salary payments for various parts of the civil sector, civil service sector, I should say. But, Bill, can you provide some anecdotal information on that, too? Thank you.

MR. HAGELMAN: I'm great at anecdotes, not at facts.

MR. HAGELMAN: But thank you. There was an original emergency $20 payment that was provided in May. It's been followed up with a second emergency payment of $30 to bring the grand total to $50. Those that they missed the first time around got it in the second payment.

In almost every single governate--okay. I only know about the south so I won't even presume what's going on elsewhere. In the four governates that our team assessed, there was either money that was found in the local banks, government-owned banks, or there were funds--literally it was called "mattress money." This is money that they found squirreled away, and this was all in Iraqi dinars. And they have been able to actually start payments of civil services--civil servants with those Iraqi dinars.

MR.: So in terms of--

MR. GUY: Just one thought on the laborers at the port of Umm Casr. We're paying them. Three thousand five hundred of them work every day at the port. We're paying them out of our funds. So we're trying to get them to work, yes, and get money into the economy.

MR. : Keep people coming back.

MR. GUY: Yes. So they're working unloading ships as we speak at the port of Umm Casr.

MR. : And they're getting paid.

MR. : Jim, the water side?

MR. BELL: I know that UNICEF is paying their staff that are involved in the water and sanitation sector, as are the NGOs that are employing people in the activities that they're involved in.

As far as the water authorities in Baghdad that I'd mentioned and also in Basra, I don't have a response to that. I don't know if that's something that Bechtel's going to pick up or how that's going to be handled.

MS. PETERSON: That said, the water authorities may well be being paid. We just don't have that full information up here.

MR. CALDWELL: Hi. I'm Tom Caldwell. I'm with Greco International. We're actually providing some of the generation in Umm Casr port.

A couple questions come to mind. You mentioned 3,500 megawatt being online currently, roughly, and a goal towards 4,400 megawatt by midsummer. How much of that do they see as being potentially used through the existing power systems, bringing those back online versus utility augmentation, with utility grade diesel generation at 11 kv, 132, 400, whatever it may be? And part of that--the second question being obviously distribution, the distribution network being a major problem in the region. In what capacity is Bechtel chartered or USAID chartered to provide distributive electricity regionally to lift stations, water--at water-pumping stations, those type of locations, and putting regionalized generation in each of those locations rather than distributive electric generation?

MR. GUY: Thank you. I think when we envisioned going into Iraq some few months ago, we envisioned more generation brought in from the outside as in small--as in diesel generation. When we got there, we found the network was not in bad condition and we could probably get more power faster from the grid. That's been our focus, except in places like the seaport and the airports where that needed very highly specialized and very quick sources.

So I think the primary, the main source of power will be from the grid, and one of the sources will be getting natural gas into the pipeline for stations which burn natural gas, which otherwise are operational but can't operate without fuel.

So the growth will come from the grid, not from small power plants, although there will be places, as you say, lift stations, where we'll put in small generation to operate it in the meantime. But we're focusing on the grid as our primary source of growth in the power supply.

MS. PETERSON: Could I--I'm sorry. Before you ask your question, I apologize, I just wanted to follow up on the salary payment question as well.

The electrical engineers and the water authority personnel are part of the civil servant cadre, let's say, and they are receiving resources through civil affairs, the Department of Treasury efforts, et cetera, in-country.

Bill Hagelman, with the facts, not the anecdotes, sorry, clarifying that for me. Thank you.

MS. : I could use a little clarification, too, actually. At the very beginning of your remarks, you mentioned that CPA is coordinating closely with USAID, and I was wondering to what degree have they just basically completely delegated their role to USAID, or are they still involved in the reconstruction of the electrical grids? Is it sort of separate, or is there some overlap there? I'm not sure about the relationship between the two agencies.

MS. PETERSON: Okay. Per presidential directive, Ambassador Bremer is overseeing and managing the entire Iraq effort in-country. And USAID is part of the interagency and coalition effort to address a range of different sectors and needs. Our mission director is Lou Luck (ph), and he works closely with Ambassador Bremer as Ambassador Bremer coordinates the overall responses in addressing needs, et cetera.
Does that clarify?

MS. : [inaudible].

MS. PETERSON: And I apologize. If you wouldn't mind coming to the microphone, if you have a comment.

MS. : I guess I'm just--I'm still not really clear. So USAID then has basically sole responsibility at this point for the immediate reconstruction of the electrical grid?

MS. PETERSON: USAID is taking the lead on addressing the electricity needs.

MS. : And that's just sort of in the short term, but in the long term I assume it's not entirely clear?

Jim, do you want to elaborate a little on that, or are you--

MR. GUY: You've captured it.

MS. PETERSON: Okay. And, again, Ambassador Bremer is overseeing the overall efforts by a range of stakeholders and participants in this.

MS. CREEGAN: Hi. I'm Avery Creegan (ph) with the (?) Group. I had a fairly specific question. You mentioned that two contracts have been given, one for the bridge bypass. I know that went to Al-Goniyah (ph). I was wondering if you knew the firm name that was going to be awarded the contract in the port of Umm Casr.

MR. GUY: It hasn't been quite awarded yet. I think it will be awarded in the next day or so. So I haven't got a name for you yet, but it's on the cusp, as they say, of being awarded.

MS. PETERSON: Please?

MR. : From the KB--power side, again. From the KBR side, what involvement does USAID have with the KBR efforts to bring back the refineries online and some of the utility requirements that may also be required there from the refinery level type power generation? Because we've heard that there's also shortfalls there.

MS. PETERSON: If you wouldn't mind wording your question, just clarifying some of the acronyms, et cetera, too, for the broad array of--

MR. : Sure. Kellogg, Brown, and Rude (ph), who is operating under a contract under--I believe it's a U.S. Army Corps of Engineers contract for bringing the refineries back online in certain regions of Iraq. Part of their mission has been to--as bringing those refineries back online is also utility and utility support, power grid to those specific refineries. What involvement does USAID, therefore, have in that process? How involved are they? Will those finances be coming through KBR or the Bechtel group for utility--for utility power costing?

MS. PETERSON: Thank you.

MR. GUY: Thank you. I'm not certain how the funding will flow, but USAID through Bechtel is working at the refineries to get power supply into the refineries. KBR is primarily focused on the refinery itself and not power supply to the refinery, although those are not always separable. But Bechtel is charged with the job of getting power to the refineries or providing supplemental power at the refineries if necessary. But how the funding will flow, that's something above my level of expertise.

Thank you.

MR. : My name is Jim (?) from the Shell Group. Mr. Hagelman, you had mentioned in the port city of Umm Casr the Kuwaiti Government had donated water to that area. Was that as a result of a particular urgent need for that area, or was there any particular reason for that one region? And if so, is it still a requirement?

MR. HAGELMAN: Actually, yes. The water was donated specifically as a result of the war that took place, which had disrupted all of the water delivery into Umm Casr. Umm Casr is right there on the border with Kuwait, and, in fact, there is a part of the town that's actually in Kuwait as well.

Because it was the first entry point into Iraq when the forces starting moving farther north, the Kuwait Government wanted to show that it was a good coalition partner, and this was one of the things that they were willing to offer. I believe the pipeline itself was done by the Corps of Engineers, and the water, which comes from an underground spring, came from Kuwait itself.

It was provided absolutely--the water itself was provided absolutely free up until the end of May. Whether it's been extended since the end of May or not, I don't know. That allowed us sufficient time to sort out the fact that, as I mentioned, the wash water came through a pipe that came from Basra that had been disrupted and actual potable water had been tankered--had always been tankered in. It had never been delivered by water pipes. And the re-establishment of how that tankering operation was going to happen from--actually, we got conflicting stories. Some people told us it was from Basra. Other people said it came from Baghdad. Because things were so highly centralized, as crazy as it sounds that water would be driven all the way down from Baghdad, it really wouldn't surprise me if indeed it was in many cases delivered by tankers from Baghdad. But it was a specific response to meet an urgent humanitarian need.

MR. : I'm familiar with the Iraqi water projects because I was one of the major contracts in 1980 before I came to United States.

MS. PETERSON: Would you mind also just elaborating a little more on your question in terms of the--

MR.: My question, there were existing projects and most--some of them already had been even tendered and--received the tenders, and maybe some of them even been awarded. I'm asking, the previous work of bidding and a project's design, is there any plan to pursue that or consult them, or do you have any plan for these projects?

MS. PETERSON: Okay. Is this in relation to the Oil for Food Program contracts that were--

MR. : Yeah.

MS. PETERSON: --undertaken?

MR. : Yes.

MS. PETERSON: Okay. That is still under discussion and review. Right now we're focused on immediate repairs, et cetera, of the--

MR. : Thank you.

MS. PETERSON: --water/sanitation systems.

MR. : Dana, you mentioned that there was going to be a Bechtel conference in Iraq the 18th of June?

MS. PETERSON: That's what the plan is.

MR. : Okay. Is there--

MS. PETERSON: Recognizing the fluid situation.

MR. : Understood. Is there part of the plan that that would be--just as this presentation is being webcast, would that be available on the Web, on the Net?

MS. PETERSON: We will need to verify with colleagues, but given the state of infrastructure and technology there--

MR. : Right.

MS. PETERSON: --I would say that it is going to be focused on individuals that are in-country as participants.

MR. : Okay. Will there be a transcript available on your website, anything like that?

MS. PETERSON: We can follow up on that, yes.

MR. : Some kind of information follow-up on--

MS. PETERSON: Sure.

MR. : Even if you can't webcast from there, if a videotape could be made, brought here, and then put on your website, I think it would be outstanding.

MS. PETERSON: Thank you for that feedback. We will inquire to colleagues in the field and try to make that arrangement.

MS. PETERSON: Okay. Well, thank you very much. We'll look forward to seeing you at the next one on Thursday.

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