A total of $82 million from the coalition force's Development Fund for Iraq was allocated for the pipeline repair but it was not clear how much had actually been spent, said the independent Office of the Special Inspector General for Iraq Reconstruction in a report.

Kellogg, Brown and Root, a Halliburton subsidiary which was originally supposed to build the pipeline, gave varied estimates of the actual cost of work performed, ranging from $1.8 million in March 2004 to less than $1 million in June 2004, the report said.

It subcontracted out much of the project to Iraq's State Company for Oil Projects, or SCOP, a company the report called inexperienced. Three places where the pipeline crossed canals were originally to be done by KBR but its contract was terminated and given to Parsons Iraq Joint Venture, or PIJV.

Violence has also taken its toll on the pipeline, the report said.

"According to PIJV, four separate subcontractors have refused to complete the remaining canal crossings (of the pipeline) because of threats and kidnappings," the report said.

Quality of the construction was suspect, the report said.

"The entire pipeline project lacked any significant monitoring of construction practices," the report said. "Even though its quality assurance program was limited, KBR identified that approximately 25 percent of SCOP's welds were flawed."

Last, it could not be determined how much of the pipeline was completed since inspectors could not even travel to some of the areas where the pipeline was under construction, the report said.

But it was clear that long after the March 31, 2004, deadline for completing the project had passed, what was supposed to be a pipeline that would bring billions of dollars to the Iraqi government annually was instead a leaky, polluting pipeline that carried 500,000 barrels of oil per day rather than the 800,000 the updated pipeline was designed to carry.

"Revenue potential of approximately $14.8 billion has been lost to the Iraqi government due to the unavailability of increased capacity for moving oil," the report said.