Page last updated at 14:35 GMT, Wednesday, 30 July 2008 15:35 UK

Iraq 'should fund reconstruction'

A construction site in Irbil, north of Baghdad (file photo)
Mr Bowen said Iraq's oil income could fund reconstruction

A senior US government auditor has called for American funding of Iraqi reconstruction projects to end.

Stuart Bowen, the Special Inspector General for Iraq Reconstruction, said Iraq was likely to earn more than $70bn (35bn) in oil revenues in 2008.

This, he said, meant the government was capable of funding reconstruction projects itself.

The report also criticised the Iraqi authorities for failing to improve sewage and drainage facilities.

The body which Mr Bowen runs was set up by the US Congress in 2004 as "a watchdog for fraud, waste, and abuse of funds intended for Iraq reconstruction programs".

Roger Hardy, the BBC's Middle East analyst, said the report was the latest in a string of criticisms by the watchdog of the way in which American taxpayers' money is being spent in Iraq.

It highlights a project to build a big prison in the northern province of Diyala on which $40m was spent, but which was never completed.

The California-based contractor on the project is castigated for what the report calls a wasteful failure.

The Iraqi authorities are also criticised, with the report saying that two-thirds of the raw sewage in Baghdad flows untreated into rivers and waterways.

Prices rising

An oil pipeline in Tikrit on fire after an attack (2005)
A security project has led to a fall in attacks on oil pipelines
The report praises a $34m oil security project which it credits with leading to a drop in attacks on pipelines.

This has led to a rise in oil output, although production is still below pre-war levels.

In an interview with the Los Angeles Times, Mr Bowen said that Iraq's deputy prime minister, Barham Salih, told him Iraq did not need foreign financial assistance.

"I think we ought to just take them at their word on that and focus on helping Iraq carry out its own programme funded by its own money," he said.

Our correspondent says the news that US funding is no longer needed in Iraq will be music to the ears of many members of Congress.

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