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Last Updated: Wednesday, 7 January, 2004, 12:24 GMT
Bechtel gets new $1.8bn Iraq deal
A Bechtel engineer overseeing repairs to a Baghdad power plant
Bechtel's current contract covers Iraq's power systems
The US has handed out a fresh multi-billion dollar contract to two firms to rebuild Iraq's infrastructure.

Both the firms awarded the $1.8bn deal - Bechtel and Parsons - are already on the ground in Iraq. Bechtel's existing deal is worth about $1bn.

Both are also major donors to the ruling Republican party and President George W Bush's 2000 election campaign.

The Bush administration rejected suggestions that there was a connection between donations and deals.

"This contract and selection was run completely by USAID (the US Agency for International Development)," said USAID procurement director Tim Beans.

Power: rebuilding Daura, Bayji power plants, restoring 400KW transmission lines
Water and sewage: repair Baghdad sewage system, Sweet Water Canal
Telecoms: restoring Baghdad system and national fibre-optic backbone
Ports: opened Umm Qasr to deep water shipping
Airports: restored Baghdad and Basra international airports
Buildings: rebuilt 1,239 schools, health clinics, fire stations
Source: Bechtel

"There was no influence whatsoever, either direct or indirect."

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According to Bechtel, the lead contractor on the new project, its existing work in Iraq has mostly been farmed out to local subcontractors.

The new two-year Iraq Infrastructure II deal will spend about $1bn on power projects, seen as key to getting the country's economy under way.

Another $210m is earmarked for water and sanitation, with $109m destined to fund improvements in the transport system.

Iraqi contractors will again be in line for a share of the business, as - in principle - will firms from any country not barred from government work, such as Iran or Libya.

In practice, though, non-US or Iraqi firms have yet to see much of the action.

Bechtel and Parsons are two of the largest US engineering companies.

Both have a long history of working in the Gulf. They have previously worked together on landmark projects including the construction of Jubail and Yanbu - twin industrial cities on the east and west coasts of Saudi Arabia.

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