VZCZCXYZ0034
PP RUEHWEB

DE RUEHC #0688 3621708
ZNR UUUUU ZZH
P 281649Z DEC 07
FM SECSTATE WASHDC
TO AMEMBASSY BAGHDAD PRIORITY 0000

UNCLAS STATE 170688 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ECON IZ PREL
SUBJECT: MEETINGS WITH IRAQ ELECTRICITY MINISTER 
 
¶1. (SBU) Summary:  On December 11, the Iraq Minister of 
Electricity, Dr. Karim W. Hasan, held separate meetings 
with USAID and Department of State.  At USAID he set out 
priorities for assistance and asked that these  be defined 
in a USG-GOI bilateral agreement.  At State he emphasized 
his desire to encourage U.S. companies to bid on Iraqi 
electricity sector projects.  He also noted the 
deteriorating fuel situation and the need for new 
generating projects that would come on line after current 
projects are completed.  End summary. 
 
------------- 
USAID Meeting 
------------- 
 
¶2. (SBU) Dr. Karim met with Deputy Assistant 
Administrator James Bever and other USAID officials.  He 
seeks a bilateral agreement between GOI and USG that would 
define USAID's future role in Iraq.  He listed four 
priorities for USAID assistance: 
 
-- A joint plan for the energy sector that would 
integrate planning for electricity and oil; 
-- Privatization and regulation; 
-- A new power law (this was linked to a goal of 
making Iraq the wheeling hub for the Middle East); and, 
-- Capacity building. 
 
¶3.  He cited training as an example of an activity that Iraq 
was capable of undertaking on its own.  He did not discuss 
where the line should be drawn between capacity building 
and training.  (Comment:  The inclusion of capacity 
building in his priorities may have owed more to tact than 
to the importance he attaches to it.  Capacity building is 
USAID's current focus and the meeting was attended by 
representatives of the company responsible for that 
program.) 
 
--------------------------- 
Department of State Meeting 
--------------------------- 
 
¶4.  (U) Participation of U.S. companies:  Dr. Karim met with 
NEA DAS Lawrence Butler and other State Department officials. 
 
He noted the controversy over the contracts his ministry 
has signed with Chinese and Iranian companies.  No U.S. 
company bid on these contracts, and a major purpose of his 
current trip is to encourage U.S. companies to bid on 
future contracts.  Ambassador Butler promised to support 
this effort. 
 
¶5.  (U) Some companies reportedly have criticized the 
Ministry 
of Electricity for failing to provide sufficient 
information on its project proposals.  Dr. Karim rejected 
the criticism; detailed technical project information is 
available on the ministry's web site, he said. 
 
¶6.  (U) Need for fuel and additional generation capacity:  He 
discussed the need for fuel and for additional generating 
capacity.  The Ministry of Oil has provided less fuel this 
year than last.  Dr. Karim rejected complaints from the 
Ministry of Oil that it did not receive adequate supplies 
of electricity and therefore needed to build its own 
dedicated electrical generation capacity. Refineries are 
served by dedicated lines and are given priority over 
hospitals, Karim said. 
 
¶7.  (U) Dr. Karim has worked to remove any obstacle from the 
import of diesel fuel from Kuwait, including trips to that 
country to meet with Kuwait officials.  He stated that he 
did not know what additional actions he could take, and he 
asked for USG assistance in facilitating the imports. 
(Comment:  The day following the meeting, Iraq received a 
shipment of diesel fuel from Kuwait, but this subject will 
continue to be of interest to the USG.) 
 
¶8.  (U) Dr. Karim stated that projects now under construction 
will provide an 
additional 3,000 MW of new generating capacity by 
mid-2009.  New generating projects are needed beyond that 
time, especially large thermal units that can use any kind 
of fuel.  The lack of environmental regulation allows such 
units to be constructed more quickly in Iraq than in the 
U.S. 
 
¶9.  (U) Ministry of Electricity :  Dr. Karim stated that his 
ministry is 
overstaffed.  There are 100,000 employees; only 30,000 are 
needed.  He cited this not as a problem but as a 
contribution to addressing the problem of unemployment. 
 
¶10.  (U) Dr. Karim confirmed that Ministry of Electricity 
operations and maintenance has improved and that this 
improvement has been a big factor is allowing it to supply 
electricity on a sustained basis at a new higher level. 
(Comment:  The improvement in operations and maintenance 
has been a joint USG-GOI effort.  USG has conducted 
extensive training in operations and maintenance for 
Ministry of Electricity personnel; on GOI's side, the 
Ministry's personnel have assimilated the training, and 
the Ministry has provided sufficient resources for them to 
carry the lessons into practice.) 
RICE