KLP, there are numerous examples if you follow the reports about the costs of reconstruction. Every time I read about them, my hair stands on end. Here is the most recent. It involves gasoline:
chron.com
Since in about a year Iraq will be producing all the gas it needs and more at a cost well below 20 cents a gallon, it's a no brainer swapping some of that future production for current deliveries for practically zero cost (just the carrying cost of the futures position). But, of course, in this case, there will not be much of anything for Halliburton...
Another outrage is the advertised cost for adding 2000 MW of electric capacity. All the estimates I saw are for $2 billion or more and involve super efficient brand new electric generation stations. This at the time when used, older, less efficient natural gas-fired generators (natural gas is practically free in Iraq and is mostly flared off as a byproduct of oil production) can be had for almost nothing in the US and Western Europe.
A third general problem is the heavy involvement of foreign (mostly US) consultants in the rebuilding process -- they all come with armed imported guards too. They are very expensive, don't know the country and the existing infrastructure, and are the main reason for cost bloat. Saddam did his rebuilding after Gulf I practically on a shoestring and in record time. He used exclusively Iraqis, who are a pretty resourceful and relatively well educated people. Now we got a swarm of foreign consultants (many from Halliburton's consulting arm KBR), who, no matter how lowly, are getting paid six figure salaries -- understandably, given the risk. Each one of these salaries can pay for hundreds of Iraqis, many of them University educated, hanging around US army compounds, begging for jobs. |
