Vital reconstruction work in Iraq has almost completely ground to a halt after being "screwed up" by the deteriorating security situation in the country, senior coalition officials have told the Guardian.
Unless the situation improves dramatically in the next few weeks, essential work on the electricity network will not be complete before the extreme heat of the summer arrives, raising the prospect of months of power cuts similar to those that led to riots and widespread discontent last year, the officials warned.
"It is screwing up the timetables completely, so for things like electricity, essential work that should have been done over the last three or four weeks has not been done," one senior official said.
"We are at risk of moving into the summer period with the repairs not complete, which means we are going to have massive demand and not very good provision. So from that point of view, it is a disaster."
The warnings came as it emerged that the insurgency has forced two of the biggest contractors, General Electric and Siemens, to suspend operations in Iraq. Siemens has been involved in attempts to restore the Daura power plant in Baghdad, listed by USAID, the development agency, as being one of the most important electrical projects in the country.
The security problems are delaying work on about two dozen power plants, as well as a number of large-scale water and sewage treatment projects across Iraq.
The American-run coalition provisional authority has always considered the reconstruction and rehabilitation of Iraq's electrical and water infrastructure as being key to persuading Iraqis of America's goodwill, as well as crucial in efforts to create a functioning democracy.
Officials said that since the increase in violence at the beginning of the month, nearly all foreign contractors working in Iraq had either fled the country or pulled workers back to secure bases.
"The best figure we've got is that about 25% of contractors had currently pulled out of country, albeit temporarily," a coalition source said. "However, that is putting a brave face on it because the other 75% have pulled back to base. They will argue that they are doing essential activities in the base like getting the paperwork straight. Yeah, well give me a break, how many times can you rewrite the scope of works and re-do your personnel accounts?"
So far this month more than 40 civilian foreign nationals have been kidnapped and 10 killed. In the same period nearly 100 US troops have died, the worst monthly total since the invasion of Iraq.
Several countries including Russia, Portugal, Poland and France have urged their citizens to evacuate amid the wave of attacks on civilians. The government in Moscow offered to airlift more than 800 Russians and citizens of ex-Soviet states out of Iraq after eight Russian and Ukrainian workers were briefly kidnapped in Baghdad.
The men, who spent 19 hours in captivity, were working for the Russian contractor Interenergoservis, building a power plant in Baghdad. It is understood that work has almost entirely stopped since the kidnappings.
A coalition official said one of the main problems was that because of knock-on effects each day's delay now equated to a week's delay further down the line.
"If that continues for another few days or a week then we can keep a brave face on it and say it is not really affecting the critical path with the exception of a few individual projects, but if it goes on very much longer after that then we would have to say we are losing momentum of the project as a whole," he said.
"Either things can get better in the sense that they return to a level of security problems that we had five or six weeks ago or the worst case scenario is what is happening in Falluja and Najaf where we get substantially greater violence, substantially greater numbers of contractor kidnappings, and, if that happens, essentially it will mean a freezing of the reconstruction effort at that stage."
Publicly, the British and US governments are trying to play down the extent of the problems.
Brian Wilson, the prime minister's special envoy in Iraq, yesterday told a conference of businessmen in London that despite the security situation they should not lose sight of the longer- term objective of helping Iraqis to rebuild their infrastructure and economy.
"In doing so we will help Iraq restore the confidence and prosperity they deserve. So it is all the more important that you use this event to build relationships and sow the seeds of a long-term commitment to Iraq and its people," he told the conference, called Iraq Procurement: Meet the Buyers.
However, one contractor from the Netherlands, who did not want to be named, told the Guardian that his company would not send anybody to Iraq in the present security situation.
"There is just no way the board would allow it. We are trying to bid for work that can be done outside Iraq - spare parts, overhead power lines etc. But who on earth would actually want to go there now?"
© Guardian Newspapers Limited 2004