First Major US Contractor pulls out of Iraq

[maddogchen]

Major US contractor withdraws from Iraq reconstruction effort: report

Contrack International Inc. has reportedly become the first major US contractor to pull out of the reconstruction effort in Iraq (news - web sites), adding that high security costs were to blame.


"We reached a point where our costs were getting to be prohibitive," company president Karim Camel-Toueg told the Los Angeles Times.

Contrack, based in Arlington, Virginia, had won a 325-million-dollar award to rebuild Iraq's shattered transport system.

US officials said Contrack's decision to terminate work in Iraq was reached with the US government in November, but had not been publicly disclosed.

Contrack, the leader of a partnership that won one of 12 major reconstruction contracts awarded in 2004, was the largest company to pull out of Iraq to date, the officials told the Times.

But the company's move would not hamper rebuilding in Iraq, they said, adding that the contract would be put up for rebidding, a process which the newspaper said could take months.

"It's not a terrible loss," Army Burns, spokesman for the Pentagon (news - web sites)'s Iraq Project and Contracting Office, told the Los Angeles Times.

But some analysts thought differently.

"It's a very bad sign," said Michael O'Hanlon, a scholar at the Brookings Institution thinktank in Washington. "If this is how other private companies are thinking, it's a very bad potential warning."

In the eight months Contrack was under contract in Iraq it was paid about 30 million dollars, mostly for site assessments and design work, company and US officials told the daily.

The Conrack partnership intended to build new roads, bridges and transportation terminals in Iraq, but only managed to refurbish a handful of train depots, company officials said.

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Looks like ventures in Iraq are fast becoming unprofitable. Is Halliburton next?

 

[halik]

pulling outta 325 mil contract... damn

 

[KidViciou$]

well what would you expect halik? that the execs each get only ONE yacht this christmas??? jeez, you really are a grinch

 

[EagleKeeper]

The key issue is the security costs.

Contracts were bid based on a stable reconstruction environment. These companies are having to pay private security people upwards of $100/hr to do a job that was not envisioned. There is no Iraqi private security to cover those slots.

 

[Red Dawn]

Originally posted by: EagleKeeper
The key issue is the security costs.

Contracts were bid based on a stable reconstruction environment. These companies are having to pay private security people upwards of $100/hr to do a job that was not envisioned. There is no Iraqi private security to cover those slots.

I'd have to be paid much more than $100.00 and hour to work over in the Sh!thole. More like $1000.00 an hour and I'd still have to think long and hard about it.

 

[KidViciou$]

Originally posted by: EagleKeeper
The key issue is the security costs.

Contracts were bid based on a stable reconstruction environment. These companies are having to pay private security people upwards of $100/hr to do a job that was not envisioned. There is no Iraqi private security to cover those slots.

i agree, they can no longer afford the $500/night hotel rooms