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Cablegate: Dirt Expected to Be Turned Soon for Anbar's Fy

VZCZCXRO1147
PP RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #2722/01 2271538
ZNR UUUUU ZZH
P 151538Z AUG 07
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 2805
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS SECTION 01 OF 02 BAGHDAD 002722

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV IZ
SUBJECT: DIRT EXPECTED TO BE TURNED SOON FOR ANBAR'S FY
2007 CAPITAL BUDGET


1. (U) This is a PRT Anbar reporting cable.

2. (SBU) Summary: Anbar Governor Ma,amoun signed 17 of an
expected 131 construction contracts for the province,s $107
million FY 2007 capital expenditure budget on August 13. Six
months ago, few if any private contractors would have stepped
forward to bid on government contracts because of fear of
Al-Qaeda retribution. However, the contract signings
illustrate the improvements in security as well as Anbar,s
capacity to appropriate a budget, analyze project tenders,
and declare the winners. Certainly, the budget system can be
improved: the PRT will sponsor at least two budgetary and
government ethics workshops in the near term. End Summary.

Contract Signings
-----------------

3. (U) Anbar Governor Ma,amoun Sami Rasheed signed 17
construction contracts, valued at $4.9 million, of an
expected 131 construction projects from the province,s FY
2007 capital expenditure budget at his private residence in
Ramadi on August 13, marking another milestone in Anbar,s
budget execution process.

4. (U) Anbar,s capital expenditure budget is the equivalent
of $107 million, which the Provincial Council allocated on
various projects in a vote taken on June 4. Provincial
officials spent the past two-and-a-half months calling for
tender offers, ensuring that interested companies had
sufficient time to submit bids, and analyzing the bid offers.

5. (U) The August 13 contract signings took place in the
presence of some 25 Provincial Council members and other
officials, and a room full of winning contractors. Ma,amoun
read aloud the winning contractor,s name, the type of
project (road repair, health clinic construction), the
project,s location, and contract value. One by one, the
winners walked the front of the room and signed their
contracts with Ma,amoun as the province,s signatory.

Then and Now
------------

6. (SBU) Six months ago, few Anbari contractors if any would
have come forward to bid on government contracts because of
Al-Qaeda retaliation. But with Anbar,s recent improvement
in security, there is now a strong interest in bidding on
government jobs. According to MNF-West records, there were
74 security incidents registered for the entire province for
the week ending August 8. That tally is the lowest such
statistic since MNF-West began keeping records in January
2005, and compares to the 450-500 incidents typically
registered on a weekly basis province-wide last summer and
fall. The security improvements in the Ramadi area are even
more dramatic than in the province as a whole. Only three
incidents were recorded for Ramadi and its environs for the
week ending August 8, compared to the 120-180 weekly
incidents typically seen last summer. Since June 1, there
have been at least 22 days in which the Ramadi area has not
experienced any security incidents at all. The city of
Ramadi, a battlefield six months ago, is no longer under
insurgent control.

Budget Procedures
-----------------

7. (SBU) In addition to the 17 contracts signed on August 13,
an additional 76 are ready for signature as soon as the
winning contractors can arrange a signing appointment with
the governor. According to the governor,s office, 32
projects must be re-bid as they either attracted no bids or
less than the three-bid minimum, and six projects have been
held back for re-design.

8. (U) At the signing ceremony, Ma,amoun,s deputy for
technical affairs explained to the audience the
three-committee procedure that was used in declaring the
winning bidder: one committee opened and recorded the bids;
a second committee analyzed the offers; and a third committee
declared the winner. The official indicated that special
consideration was given to qualified bidders who lived in the
locale where the construction would take place.

Turning Dirt
------------

9. (SBU) With the first round of FY 2007 contracts signed, we
expect dirt to be turned within a matter of days. Minister
of Finance Jabr has signaled his intention to release the
full amount of Anbar,s $107 million FY 2007 budget.

BAGHDAD 00002722 002 OF 002


MNF-West will ensure that the cash is transported to Anbari
banks to begin contract payments.

The FY 2006 Budget
------------------

10. (SBU) Unlike this year,s budget, provincial spending for
the $96 million FY 2006 is still not documented. There is no
record of a Provincial Council vote or on reconciling the
amount spent. Anbar received its FY 2006 budget from the
central government last November, at a time when the
insurgency had disrupted the normal functioning of local
government. At that time, the threat of AQI murder and
intimidation dispersed Anbar,s provincial council so that it
could not meet in the province, civil servants went
underground or avoided contact with the Coalition, and many
cities and towns did not have functioning local councils or
mayors.

11. (SBU) Both Governor Ma,amoun and Provincial Council
Chairman Abdulsalam Abdullah have told us that they, along
with a small group of other officials, selected the projects,
but no formal budgetary procedure was followed. Nonetheless,
both officials attest that the entire FY 2006 budget was
allocated, and, in their estimation, 60%-80% of the payments
have been made to the contractors. The PRT is engaged in
seeking to help provincial officials reconstruct the project
list for FY 2006.

Comment
-------

12. (SBU) Despite enduring several years of a violent
insurgency, Anbar provincial officials appear to have a
remarkable capacity to appropriate a budget, analyze project
tenders, and declare the winners. While MNF-West and the PRT
made modest contributions, the lion,s share of the credit
goes to the Anbaris themselves, who have moved forward with a
serviceable budget procedure. Certainly, there is room for
improvement: the three-committee review process may have
been a local attempt to ensure transparency, but it likely
slowed down the award announcements. Improvements can also
be made in advertising the requests for bids. With an eye on
capacity building, the PRT, in conjunction with USAID
contractor RTI, plans to sponsor at least two workshops with
provincial officials on budget execution and transparency and
government ethics in the next two months.


CROCKER

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