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Iraq violence scaring some contractors
Updated: 2004-04-23 09:25

Violence across Iraq has interrupted repair on key electricity and water systems and forced giant firms Siemens AG, Bechtel and General Electric to suspend some reconstruction projects, threatening to undermine the critical U.S. goal of rebuilding Iraq.

Iraqis close their electronics shop in the center of Baghdad, Iraq, April 22, 2004. German engineering giant Siemens AG pulled its employees out of Iraq, and U.S.-based General Electric Co. suspended some of its operations because of security concerns, officials said Thursday.  [AP]
Even the U.S. Agency for International Development, which oversees some reconstruction projects, has been affected. Some 10 percent of its non-Iraqi employees are outside the country, either sent out of Iraq or unable to come in because of the violence.

Rebuilding infrastructure is key to Iraq's economic growth and would show Iraqis a tangible benefit of the U.S.-led occupation, which many feel has brought instability. Iraqis often complain about sporadic electricity supplies in particular.

Staffers for Germany-based Siemens have stopped their work refurbishing a pair of generators at a crucial electrical plant in southern Baghdad. GE workers have left a project building a new power plant in the same area. Work by Iraqi employees and other foreign contractors continues at both sites.

The plant where Siemens was working is key to boosting generating capacity to meet the surge in power demand during Iraq's scorching summer. A coalition spokesman said the goal for electricity production 6,000 megawatts a day will be met on schedule in June.

But an official with the U.S. Agency for International Development, speaking on condition of anonymity, was less clear when the goal would be reached, saying only that generators should produce 6,000 megawatts at some point during the summer.

In south-central Iraq, work has been interrupted at three water and sanitation projects because violence by a radical Shiite militia prevents workers from reaching their jobs.

Violence this month has targeted foreigners helping in the reconstruction. Insurgents have attacked military supply convoys and killed five U.S. civilian contractors. Several dozen foreigners have been kidnapped in the past weeks, forcing them to sharply cut back travel.

Four employees of Houston-based KBR, a branch of Halliburton Co. and a major military contractor, are missing since an attack on their convoy outside Baghdad. The company was known previously as Kellogg, Brown & Root.

On Thursday, masked gunmen in northern Baghdad shot and killed a South African security contractor at a neighborhood supermarket, said Dan Senor, a U.S. spokesman in Iraq.

Several countries including Germany and Japan have urged their citizens to leave Iraq.

Siemens spokesman Andreas Fischer, in Munich, Germany, refused to say whether any Iraqi projects had been suspended. But Iraqi Electricity Minister Ayham Al-Samarei said Siemens stopped some operations after the German Foreign Ministry warned its citizens on April 12 to leave the country.

The Siemens suspension affects work at Baghdad's al-Doura power station, where the renovations are part of a campaign to increase Iraq's power generating capacity from current levels of about 4,000 megawatts.

"I am sure they will come back," al-Samarei told The Associated Press. "Siemens has lots of work in Iraq. So their absence will be very short."

A coalition official said Siemens was still working at another site in northern Iraq.

"We are still committed to help to rebuild the infrastructure, and it is our intention to continue the work as long as we can assure the safety of our employees in Iraq," Fischer said.

GE is also holding up some work.

"We have had delays in some of our work in Iraq because of the security measures that have been put in place," said GE spokesman Gary Sheffer. "Work is continuing in some cases. In some other cases the work has been delayed."

A spokesman for construction giant Bechtel said that about 10 percent of the company's projects have been suspended due to the violence.

"At the others work is continuing," said Bechtel spokesman Francis Canavan.

About 10 percent of the projects overseen by USAID have been affected because foreign contract employees and sometimes even Iraqi staff cannot reach the work sites, mainly in Baghdad and south-central Iraq, said Tom Wheelock, USAID's director for infrastructure projects.

Another USAID official said on condition of anonymity that 10 percent of the non-Iraqi staffers assigned to the country were now outside Iraq.

Last month, gunmen killed a British and a Canadian security guard protecting foreign engineers working for GE.

KBR said it had no plans to withdraw staff from Iraq. KBR has 24,000 employees and subcontractors in Iraq and Kuwait and helps supply the U.S. military with food and fuel.

"We are absolutely not pulling out," said Melissa Norcross, a spokeswoman for KBR in Iraq and Kuwait.

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