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