Bush plan's $1 billion won't go far in Iraq

The extra billion dollars of reconstruction aid in President Bush's Iraq plan won't go far in a country where electricity output still barely meets half the demand and oil production is falling short by almost a million barrels a day. The bulk of US reconstruction aid came in 2003-2005, when almost $22 billion poured into Iraq. As violence spread, some aid was diverted to Iraqi army and police forces, and much of the rest was spent on private security for rebuilding projects. Experts had estimated Iraq needed $55 billion to recover from war, mass looting and years of economic deterioration. By this 2007 fiscal year, new reconstruction aid had dwindled to $750 million. Bush has proposed adding $1.2 billion to that. By comparison, Washington is spending roughly $100 billion a year on the war itself. For electricity alone, Iraq needs $27 billion to fully rebuild the grid to meet growing power needs, Baghdad's Electricity Ministry estimates. In a new Iraq oversight report, the US Government Accountability Office (GAO) says Iraq's electricity demand averaged 8,210 megawatts last year, but peak generation reached only 4,317 megawatts. Baghdad residents got only six hours of power a day on average last summer. The US reconstruction effort added more than 2,000 megawatts of generating capacity to a system that produced 4,200 before the 2003 US invasion. But the grid has been crippled by toppled transmission towers and other sabotage, insurgent attacks, looting, poor maintenance and poor planning. Iraq's own funds for reconstruction must come from oil exports, but the GAO reports that production still falls 900,000 barrels a day short of the US goal of three million barrels, and far short of Iraq's production peak of 3.7 million in the 1970s. Oil's problems are similar to electricity's–insurgents, sabotage, maintenance–but the government oil companies are also afflicted by widespread corruption. The GAO reports up to 30 percent of Iraq's fuel products are smuggled out of Iraq or into the local black market.