10.1 | Reconstruction: March 2003 to June 2004

981. Mr Blair said that there needed to be a clear strategy for addressing the grievances

of both the Sunnis and the Al Sadr supporters, including tackling poverty in Sadr City.

He added that “large amounts of money were available, but very little was being spent”.

982. Mr Blair again emphasised the importance of better communication with the Iraqi

population. After the transition, the Iraqi Government would have increased responsibility

in this area and would need real help from the US and UK.

983. No specific actions were agreed.

984. On 18 April, Mr Richmond reported from Baghdad on the challenges of “designing

and executing post-conflict reconstruction in what effectively remains a conflict zone”.578

Drawing on discussions with Mr Bearpark, Adm Nash and USAID, Mr Richmond advised

that there was:

“Probably less activity on the ground than CPA are prepared to admit, as aid

agencies and contractors withdraw personnel to safer areas pending decisions to

re‑engage. Main foreign contractors operating at 50 – 75 percent staffing levels.

Some NGOs well below that.”

985. Washington had directed the CPA to accelerate spending, and specifically to

“ameliorate conditions in Fallujah”. Of the US$18.4bn committed to IRRF2:

• US$8.8bn was available now for construction projects, of which US$1.5bn had

been “obligated” (contracts issued); and

• US$5.8bn was available for non-construction projects, of which US$770m had

been obligated.

986. The problem was translating those figures into work on the ground against the

timetable required by the political process.

987. The PMO’s aim was to be in a position to deliver once security conditions allowed.

Adm Nash was advising contractors to bring in the minimum necessary number of

staff to “establish a bridgehead”. He had also created incentives for contractors to

sub‑contract to lower-profile and local companies.

988. Mr Richmond advised that the UK needed to consider the advice it gave to UK

development partners and contractors regarding travel to Iraq, and in particular to

consider the divergence of advice between the US and UK. The US Government

issued stricter guidance on travel than the UK, but did not seem to enforce it. The UK’s

travel advice gave him “no option but to counsel caution” to UK contractors. The

problems experienced by Foster Wheeler encapsulated the dilemma: “Risk coming out

or losing out.”

578 Telegram 173 IraqRep to FCO London, 18 April 2004, ‘Iraq: Effects of the Recent Crisis on

Reconstruction’.

171