Global Policy Forum

By Mark Tran

Halliburton, the company once headed by the US vice-president, Dick Cheney, has failed to make the shortlist for an American government contract to rebuild Iraq, it emerged today. Halliburton, an oil services company, was one of five companies invited by the US agency for international development (USAid) to bid for a $600m (£381m) contract to rebuild Iraq's basic infrastructure.

Only US companies were invited to bid, to the fury of British industrialists and unions, who pointed out that British troops are fighting alongside American soldiers. The five companies also had close ties to the Bush administration, sparking accusations that the White House was returning favours for generous political campaign contributions. Allegations of unduly cozy ties between the Bush administration and corporate benefactors has dogged the White House, going back to the scandal over Enron, the failed energy company. Last week, Richard Perle, a leading US hawk, stepped down as chairman of the Defence Policy Board, a Pentagon advisory panel. His move followed allegations of a conflict of interest given his relationship with Global Crossing - a telecommunications firm that had sought his help in winning government approval for a deal with an Asian firm.

As for Halliburton, USAid has confirmed a Newsweek report that the company is not on the shortlist of two companies to rebuild Iraq's infrastructure. What is not clear is whether Halliburton's bid was uncompetitive or whether it was withdrawn because of unfavourable publicity. A UN official told Newsweek that the bad publicity for Halliburton made the deal more trouble than it was worth, as the company depends on a lot of oil-related business in the Arab world, which is overwhelmingly against the war in Iraq. "That kind of political interest was not in their corporate interests," the UN official said. The five US companies invited to bid for the infrastructure deal were Halliburton, Bechtel, Fluor, Parsons and Louis Berger.

Under the war budget request that President George Bush sent to Congress last week, USAid will receive $2.4bn for humanitarian as well as reconstruction aid. Aside from the construction project, the agency has been soliciting bids on helping to restore Iraq's public health service, administering its airports, printing textbooks and training teachers. The scale of the work has astonished experts who have examined the plans. "We are embarking on a very aggressive effort, both figuratively and literally, at nation-building - far, far bigger than anything we have seen since the Marshall Plan," said Steven Kelman, a professor of public management at Harvard's John F Kennedy School of Government.

Rebuilding Iraq's infrastructure after war and years of sanctions will be a mammoth task and companies are eager to win contracts in an industry suffering from the global economic slowdown. Some analysts estimate that the final bill for rebuilding and improving Iraq would be roughly equivalent to the operating budget of a US state with a comparable population. Texas, with 22 million people, has a budget of $57bn. As construction companies position themselves for lucrative contracts, the rebuilding of Iraq has already emerged as a politically contentious issue. Tony Blair is at odds with the Bush administration on wanting the UN to take the lead role in running and reconstructing the country once the war ends. But administration hawks argue that the spoils of war should go to American companies as the US is bearing the brunt of the war effort.

In a possible foretaste of what is to come, the US and Britain clashed on who should rebuild the Iraqi port of Umm Qasr. USAid awarded a $4.8m to rebuild Iraq's only deep water port, which is under British military control, to an American company, Stevedoring Services of America. Britain argued in favour of returning the port to local control to win Iraqi confidence.

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