10.2 |
Reconstruction: July 2004 to July 2009
“The need
to cut back our budget [for Iraq] in 2004/05 to help meet internal
DFID
financial
pressures related to the estimating adjustment; plus the MIC
ceiling
constraint
in 2005/06; plus escalating cost relating to security … have all
contributed
to the
pressures.”
262.
DFID would
seek to deal with those pressures through “a variety of careful
financial
management
techniques” and an “active search for co-financing” with partners
including
the World
Bank and the EC. However:
“… the
scope for new activity in 2005/06 is nil and we will have to delay
until 2006/07
some of the
proposals in the pipeline with which we hoped to proceed in
2005/06.”
263.
Mr Dinham
also reported that Iraqi governorates did not yet have the capacity
to
receive
supplementary funding from sources such as the World Bank and the
US, as
DFID had
hoped.
264.
Copies of
Mr Dinham’s report were sent to Mr Benn’s Private
Secretary,
Mr Chakrabarti’s
Private Secretary, other DFID officials, and officials in No.10,
the
Cabinet
Office, the FCO, and the MOD.
265.
Mr Quarrey
marked Mr Dinham’s report to Sir Nigel Sheinwald with the
comment:
“This
is worrying – we need
to have some flexibility in 05/06, including to
support
ITG
ideas/priorities.” 152
266.
Mr Straw
made his first report to Mr Blair on the work of the Ad Hoc
Ministerial
Group on
Iraq on 24 March.153
He attached
a number of reports, included a joint
FCO/DFID
paper describing the state of the electricity sector, which he
described as
a focus
for the Group’s work.
267.
The FCO/DFID
paper stated that the Iraqi Government was struggling to
sustain
production
at more than 4,000MW per day and was unlikely to meet its target
of
producing
6,000MW per day by the summer. Demand had soared as the economy
had
grown, and
was now estimated to be 8,000MW per day (that figure would increase
over
the
summer). Power cuts would continue.
268.
The paper
identified four factors behind the failure to increase power
production
above May
2003 levels:
•
continued
sabotage;
•
the
unreliability and inefficiency of existing power
infrastructure;
152
Manuscript
comment Quarrey on Minute Dinham to Shafik, 21 March 2005, ‘Visit
to Iraq’.
153
Letter
Straw to Blair, 24 March 2005, ‘Iraq: Ad Hoc Ministerial Meetings’
attaching Paper FCO/DFID,
22 March
2005, ‘Iraq: Electricity’.
239