VZCZCXRO0997
RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #4055/01 3471503
ZNR UUUUU ZZH
R 131503Z DEC 07
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 4829
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS SECTION 01 OF 02 BAGHDAD 004055 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EAID EFIN IZ
SUBJECT: REHABILITATING INDUSTRY IN DIYALA PROVINCE - PROGRESS AT 
DIYALA ELECTRIC INDUSTRIES 
 
¶1. (U) This is a PRT Diyala reporting cable. 
 
SUMMARY 
-------- 
 
¶2. (U) In the wake of recent clearing operations by Coalition Forces 
in Baqubah, rehabilitation of the primary State-Owned industrial 
facility in Diyala province made good progress in September and 
October.  The Director General returned to the facility after 
several months' absence, the Department of Defense's Task Force for 
Business Stability Operations (aka "Brinkley Group") performed a 
thorough assessment of several manufacturing lines, and the 
Government of Iraq (GOI) has renewed commitments to support the 
facility. 
 
Progress at Diyala Electric 
--------------------------- 
 
¶3. (U) The months of September and October were busy for the PRT's 
primary industrial focus at the moment, Diyala Electric Industries 
(DEI).  First, engineers and production experts from the Department 
of Defense's Task Force for Business Stability Operations (aka 
Brinkley Group) performed a four-day site assessment which was very 
successful. They were able to evaluate the distribution transformer 
plant, power transformer plant, oxygen/argon plant, and the 
fiber-optic plant.  The Brinkley Group security consultant also 
completed a security survey of the facilities and will provide the 
PRT with his recommendations. 
 
¶4. (SBU) DEI provided greater access to personnel and equipment than 
ever before.  The provincial government, Brinkley Group, PRT, and 
3-1 Cavalry (CAV) Brigade (BDE) have developed a division of effort 
plan to bring four of DEI's production lines (x2 transformers, 
oxygen, and fiber-optic) back up to full production capacity.  The 
provincial government has budgeted approximately $7M USD from the 
2007 Budget to be used primarily for purchase of raw materials.  The 
Brinkley Group will provide a grant of at least $500k USD to be used 
primarily for purchase of repair parts.  They will also contact the 
World Bank regarding low-interest loans that could be used to 
replace worn out machinery.  Finally, the PRT and 3-1 CAV BDE are 
exploring options to provide sufficient power to the plant for full 
operation, which will probably involve purchasing generators. 
 
¶5. (SBU) Second, the Director General of DEI, Abdul Wadood, returned 
from his self-imposed exile after three months. Under Abdul Wadood's 
previous tenure, DEI was moribund.  He provided a long list of 
excuses why he could not get the plant running again, and showed no 
initiative to overcome them.  Since he fled the province in June DEI 
had made steady progress towards partial operation with the Acting 
DG, Mahmoud Abdul-Razaq, in charge.  Fortunately, Mr. Wadood appears 
to be more cooperative now than before he left in May.  For example, 
he reports that DEI has increased the number of commuter buses 
moving personnel in the greater Baqubah area from seven, at the 
beginning of the month, to thirty-three by the end.  Mr. Wadood also 
claimed that that the working hours have increased by one hour since 
his return and are now from 0800 to 1200.  He committed to 
increasing them by two more hours from 0800 to 1400 after Ramadan is 
over in mid-October.  He's also committed to attending the weekly 
Governor's cabinet meeting at the Governance Center (GC) on Monday 
mornings. 
 
¶6. (SBU) Third, the Deputy Commanding General of Multinational 
Force-Iraq (MNF-I), Lieutenant General Rollo, visited DEI along with 
the Deputy Governor.  During the visit it was clarified that the 
Ministry of Industry and Minerals (MIM) had received approximately 
$500k USD recently allocated by the Deputy Prime Minister's office 
for back pay and victim compensation, but it has not provided the 
funds to DEI.  When pressed, Mr. Wadood also admitted that the 
presence of the Iraqi Army is needed at DEI in order to protect the 
workers, and they should not be removed.  To illustrate the fragile 
security situation in Diyala, twelve DEI employees were abducted 
this month when their bus was intercepted by Anti-Iraq Forces (AIF) 
on the road just west of DEI.  Fortunately, they were quickly 
released unharmed once they identified themselves as Sunni. 
 
¶7. (SBU) Finally, according to Mr. Wadood, the Ministry of Industry 
and Minerals (MIM) has recently made several encouraging moves 
toward helping DEI become functional again.  First, MIM has 
allocated $4 billion ID for DEI to purchase a critical piece of 
machinery for the Transformer plant.  The MIM has made the 
stipulation that the equipment must be purchased by the end of the 
calendar year or DEI will lose the money, and Mr. Wadood is now in 
negotiations with a German company to supply it.  Second, the MIM 
asked the DG whether DEI needed two heavy fuel oil generators (5 MW 
and 7 MW), which it would import from Korea, to help insure 
sufficient electrical power to the production lines.  DEI replied in 
the affirmative via official letter in October. 
 
COMMENT 
------- 
 
 
BAGHDAD 00004055  002 OF 002 
 
 
¶8. (SBU) All agencies of the US Government need to continue 
providing their full support to DEI to further encourage the 
positive steps being made at DEI.  Increasing production will 
provide desperately needed employment opportunities, inject needed 
currency into the local economy, provide equipment critical to 
repairing Iraq's damaged electrical infrastructure, and directly 
support Coalition Forces counter-insurgency strategy in the recently 
liberated city of Baqubah. End. 
 
BUTENIS