US urges new aid to Iraq power grid

By Alastair Macdonald

TAZA, Iraq (Reuters) – A senior U.S. official said on
Sunday Gulf Arab states and other foreigners should help Iraq
build new power stations, as U.S. investment in the electricity
sector winds down after three years of reconstruction aid.

But some $20 billion of investment may be needed to start
meeting all Iraq’s electricity demand, and there is no quick
end in sight to chronic shortages of power that are among the
biggest complaints of the Iraqi public.

Touring a new, U.S.-built power plant that provides some 6
percent of the power now available on Iraq’s grid, U.S.
diplomat Daniel Speckhard said the new government was “well
positioned” for a “transition to self-reliance” in electricity,
funded from state revenues generated largely from the export of
oil.

“We’re not doing new construction projects,” Speckhard, who
oversees reconstruction efforts for the U.S. embassy, told
reporters invited to the 325-megawatt gas-turbine power station
at Taza, near Kirkuk, 250 km (150 miles) north of Baghdad.

He added the U.S. government was funding training and
maintenance programs for a power system capable at present of
supplying only about half the country’s needs and was seeking
further money for this from Congress.

But, in keeping with overall U.S. strategy three years
after invading, the emphasis was now on encouraging Iraq to
fund its own reconstruction through oil sales and on pressing
other governments and international institutions to provide
aid.

“There is now a donor coordination working group for
electricity,” Speckhard said. “We’re looking forward to
Japanese lending, we’re looking forward to World Bank lending.”

“Gulf countries could do a lot more in the area,” he added.
He noted some estimates put the cost of doubling Iraq’s
generating capacity to meet demand at about $20 billion.

Japanese donors are involved in overhauling a major power
station at Mussayyib, just south of Baghdad, he said.

U.S. FUNDS ENDING

Washington has allocated nearly $20 billion to helping
reconstruction in Iraq, but programs are due largely to end
this year and an unexpectedly large portion has gone on
security costs, prompting criticism in Iraq and the United
States about the effectiveness of the project.

U.S. officials have criticized failures of oversight, waste
and corruption in the management of the aid budget.

Engineers working at the Tuza power plant, which has its
own police force to guard it from insurgent attacks, said
sabotage had not directly affected the plant, built over two
years under U.S. control at a cost of $178 million.

But thousands of kilometers of power lines stretching
across the country as well as the gas pipelines supplying the
plant from the nearby Kirkuk oil field are vulnerable.

A concentration of insurgent attacks on power lines to
Baghdad, where up to a third of Iraqis live, limited residents
of the capital to just six hours of electricity a day last
week, Speckhard said, against a national average of 13 hours.

Residents in Kirkuk, by contrast, told Reuters they had
almost uninterrupted power at the moment.

U.S. officials say peak generating capacity has almost
doubled since the invasion and they have ensured a more even
distribution than under Saddam Hussein, when the capital had
few power cuts and some provinces had little power at all.

But demand has also risen, hitting a peak of 8,845 MW last
summer compared with peak generating capacity of 5,400 MW — of
which more than half can be kept off-line by sabotage and
maintenance problems.