Halliburton Contracts in Iraq: The Struggle to Manage Costs
By JEFF GERTH and DON VAN NATTA Jr.
WASHINGTON, Dec. 28 — The Qarmat Ali water treatment plant in southern Iraq is crucial to keeping the oil flowing from the region's petroleum–rich fields. So when American engineers found the antiquated plant barely operating earlier this year, there was no question that repairing it was important to the rebuilding of Iraq. Setting the price for the repairs was another matter.
In July, the Halliburton Company estimated that the overhaul would cost $75.7 million, according to confidential documents that the company submitted to the Army Corps of Engineers. But in early September, the Bush administration asked Congress for $125 million to do the job — a 40 percent price increase in just six weeks.
The initial price was based on "drive–by estimating," said Richard V. Dowling, a spokesman for the corps, which oversees the contract. The second was a result of a more complete assessment. "The best I can lamely fall back on is to say that estimates change," said Mr. Dowling, who is based in Baghdad. "This is not business as usual."
[P6: Okay, the next paragraph says:
"The rebuilding of Iraq's oil industry has been characterized in the months since by increasing costs and scant public explanation. An examination of what has grown into a multibillion–dollar contract to restore Iraq's oil infrastructure shows no evidence of profiteering by Halliburton, the Houston–based oil services company, but it does demonstrate a struggle between price controls and the uncertainties of war, with price controls frequently losing."
I don't know that I believe there's no profiteering going on, but leaving that paragraph out entirely gives the wron idea about what the article actually says. So I do it like this, to express my opinion as well.]
