10.2  |  Reconstruction: July 2004 to July 2009

171.  At the end of 2004, in response to continuing concerns that the US and the PCO

did not see the South as a priority and that the World Bank and UN Trust Funds were

not yet fully operational, DFID assessed that it would have to “take more of the strain

bilaterally in 2005”, in particular on infrastructure and job creation in the South.

172.  On 18 November, in response to a request from the FCO, Mr Collis reported on

the state of reconstruction in the South.99 The IIG was not funding any significant capital

projects in the South and the PCO remained a “weak and Baghdad-centric” organisation.

PCO projects would not have a significant impact on service delivery until well into 2005.

173.  DFID officials met senior PCO officials in Baghdad on 2 December.100 The British

Embassy Baghdad reported that, in response to the security situation, the PCO planned

to focus on “low-hanging fruit” (visible projects such as repairs to schools and clinics)

at the expense of major longer-term reconstruction projects and building Iraqi capacity.

In addition, if the US Congress did not agree further funding for CERPs, the PCO was

likely to reallocate funds from stable to less secure areas.

174.  The Embassy concluded: “We need to fight to keep PCO funding in the South.”

175.  At the 9 December meeting of the AHMGIR, Ministers commented that the PCO

was “large and unwieldy” and faced a difficult balance between quick fixes and long-term

reconstruction.101 UK influence was limited: the PCO was a US organisation following US

rules “though it was sometimes open to UK advice”. Much of its effort was being pulled

into Fallujah and away from the South.

176.  Mr Chakrabarti and Mr Drummond visited Baghdad and Basra from 6 to

8 December to review DFID’s programmes and assess priorities for 2005.102

177.  Their 13 December report to Mr Benn advised that with the PCO “diverted” to

immediate reconstruction work in cities around Baghdad, and the World Bank and

UN Trust Funds not yet fully operational, DFID would “have to take more of the strain

bilaterally in 2005”. DFID’s resources were, however, limited and “must be used to

support Iraqi initiatives and strengthen their capacity”.

178.  On PCO activity in the South, the report stated:

“As junior partners in the coalition, our ideas are listened to, but our influence over

US spending will remain limited. We need to face up to the fact: the South will not

be a strategic priority for the US.”

99  Telegram 200 Basra to FCO London, 18 November 2004, ‘Southern Iraq: Essential Services,

Reconstruction’.

100  Telegram 455, Baghdad to FCO London, 5 December 2004, ‘Iraq: Project Contracting Office (PCO):

Changing Priorities’.

101  Minutes, 9 December 2004, Ad Hoc Group on Iraq Rehabilitation meeting.

102  Minute Chakrabarti/Drummond to Secretary of State, 13 December 2004, ‘Iraq Visit, 6-8 December’.

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