VZCZCXRO5219
PP RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #1396/01 1261100
ZNR UUUUU ZZH
P 051100Z MAY 08
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 7187
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS SECTION 01 OF 05 BAGHDAD 001396 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID PREL ECPS IZ
SUBJECT: CHALABI'S PROVISION OF SERVICES COMMITTEE - APRIL 22 and 29 
 
Ref:  A. 08 Baghdad 1245 
 ¶B. 08 Baghdad 1150 
 ¶C. 08 Baghdad 1091 
 
¶1. (SBU)  SUMMARY: At the April 22 meeting and for a third straight 
week the Ministry of Trade complained that some of their trucks 
carrying needed food rations for Sadr City were turned away at 
checkpoints by the Baghdad Operations Command (BOC). The Amanat also 
blamed the BOC's strict checkpoint policy, which they claim 
prohibits laborers from exiting Sadr City, for significantly limited 
trash collection services across all Baghdad. The BOC had strong 
words for both the Ministry of Trade and Amanat's accusations - 
reporting that food rations were possibly poisoned and claiming that 
Amanat employees do not show up for work because of threats, not 
checkpoint delays. Dr. Chalabi was visibly annoyed by both reports 
given his committee's previous recommendations to alleviate the 
checkpoint "choke points". (Ref A and B) 
 
¶2. (SBU)  Also at the April 22 meeting, the Ministry of Industry and 
Minerals (MIM) and brick factory owners from Nahrawan accused one 
another of corruption and fraud. The brick factories are suspected 
of selling Heavy Fuel Oil (HFO) - the fuel used to operate the brick 
factories, on the black market, rather than using it to operate the 
factories. The factory owners claimed that HFO distribution charts 
were being falsified by government employees, making it appear as 
though factory owners were receiving larger quantities of HFO. 
Chalabi refereed the dispute and later determined that he would send 
a memo to the National Security Advisor (NSA), strongly suggesting 
that Nahrawan brick factories be supplied with HFO from the Bayji 
refinery. 
 
¶3. (SBU)  Attending the meeting for the first time, the General 
Director (GD) of Rail Services for the Iraq Ministry of 
Transportation hailed rail capabilities in Iraq. He pled for 
increased utilization from other Iraqi ministries, particularly 
Trade and Oil. Initially expressing reluctance to increase reliance 
upon rail due to external threats, the Deputy Minister of Trade 
softened her tone and agreed to meet privately with the GD. The 
Ministry of Oil (MoO) was not in attendance; therefore their opinion 
regarding greater rail utilization remains unknown. 
 
¶4. (SBU)  The Baghdad Water Authority (BWA) reviewed short and long 
term solutions to expected summer water shortages, including water 
distribution via tankers and dredging the Tigris near the Karkh 
Water Treatment Plant. (Ref C) At the conclusion of the April 22 
meeting, the Ministry of Electricity (MoE) reported that summer 
electricity production levels (5400 MW) were only attainable if the 
security situation improved. 
 
¶5. (SBU) Water scarcity, the impact on Sadr City services due to 
ongoing kinetic activities and transportation needs were on the 
April 29 agenda, with little new news to report and fewer new 
resolutions or recommendations offered. Interestingly, after the 
Amanat proudly reported its activities to address water scarcity, 
including tanking water, Deputy Mayor Naem crumbled under 
questioning from Dr. Chalabi. He threw up his hands in disgust and 
said that the tankers wouldn't even temporarily solve expected water 
shortages. The Deputy Minister of Trade told of the same problems 
discussed at the April 22 meeting with little progress to report on 
previous recommendations. FAQ spokesperson, Mr. Tahseen al Shekhli 
painted a grim picture of education in Sadr City, although Dr. 
Chalabi chastised him for spreading propaganda. The Deputy Minister 
of Health was in attendance for the first time in over 3 weeks. He 
provided a brief, but upbeat report on health services in Sadr City. 
The meeting ended with a report on likely repercussions of an 
ongoing dispute between Zain, the largest cell phone provider in 
Iraq, and a security firm providing security for cell phone towers 
throughout the country. According to the briefer, if the dispute is 
not resolved immediately, cell phone service will be disrupted, 
dealing a significant blow to intelligence and infrastructure 
programs. End Summary 
 
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Sadr City Services Show No Apparent Improvement: 4/22-4/29 
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¶6. (SBU)  At the April 22 meeting, the Deputy Minister of Trade 
reported that some staple ration items, including sugar, cooking oil 
and detergents have been provided to the residents of Sadr City for 
the month of May despite checkpoint delays and overall ration 
shortages. Six other items though, including milk, flour, wheat, 
soap and tea, still need to be provided. Reported first on April 8, 
milk has not yet reached the requisite testing centers due to 
violence. (Ref B) There are overall shortages of wheat and soap and 
some of the other supplies are late because they cannot be delivered 
to Sadr City, again because of checkpoint procedures. Chalabi was 
not able to mask his discontent - and in fact reminded the committee 
that they have done their part to alleviate checkpoint delays, 
sending three memos to the BOC towards that end. (Ref A and B) A 
representative from the National Security Advisor's (NSA) office and 
 
BAGHDAD 00001396  002 OF 005 
 
 
Iraq-Executive Steering Committee (I-ESC) Secretariat, Mr. Sayid, 
suggested that this issue be elevated to the I-ESC, a weekly meeting 
hosted by Prime Minister Maliki and attended by Iraqi Ministers and 
Baghdad local government officials, including the Mayor, Governor 
and Provincial Council Chairman. The committee did not object so the 
Ministry of Trade is expected to provide a detailed report for an 
upcoming I-ESC. 
 
¶7. At the April 29 meeting, the Ministry of Trade reported that 78 
tons of children's milk was finally distributed, but another 23 tons 
is needed. Deputy Minister Soiba announced that 19 containers, or 
350,000 tons of wheat were at Umm Qasr port in Basrah, waiting to be 
unloaded. This sparked a larger conversation about the current 
supply chain management system for Iraq's Trade Ministry. Dr. 
Chalabi was outraged to learn that the current supply chain system 
takes on average 3 months to unload 1 month's worth of supplies. 
Chalabi demanded a 6 month forecast of wheat purchase, delivery and 
distribution. 
 
¶8. (SBU)  Trash continues to pile up not only in Sadr City, but 
throughout all of Bagdhad, reported Baghdad Deputy Mayor Naem, a 
Sadrist, at the April 22 meeting. Because the vast majority of the 
Amanat's laborers are from Sadr City and cannot get through the 
checkpoints, the Deputy Mayor estimated that less than 50% of trash 
produced daily is removed daily. The BOC, in an agitated voice 
countered, saying that they "...are not preventing people from 
getting to work". In fact, the General in attendance said that many 
of his soldiers are from Sadr City themselves. He pointedly blamed 
militias for intimidating Amanat employees. He claimed that the 
Iraqi Army faces similar threats. 
 
¶9. (SBU)  (The Deputy Minister of Defense said that the Iraqi Army 
and police are being treated as criminals and narrated an attack on 
an Iraqi soldier and his family in the Ghazaliya area simply because 
of his affiliation with the Iraqi Army. Dr. Chalabi expressed 
sympathy, but stuck to his task, improving services in Bagdhad. This 
issue was not one the committee neither could nor would address.) 
 
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Sadr City Check-Up 
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¶10. (SBU)  At the April 29 meeting, the Deputy Minister of Health 
said that since April 28, 2,605 people have been wounded in action 
during the ongoing conflict in Sadr City. Another 925 people have 
been killed in action. Approximately 80% of medication needs are 
currently met and ambulance movement in and out of Sadr City has 
improved since last report, over three weeks ago. The Deputy 
Minister said that one hospital, Martyr Sadr Hospital, has been 
without power for over 10 days, but its current status is good due 
to generators. Dr. Chalabi complemented the Ministry's efforts and 
said he intends to provide incentive awards to the doctors working 
over time for Sadr City. 
 
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Fueling Sadr City 
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¶11. (SBU)  Fuel delivery for Sadr City was briefly discussed at the 
April 29 meeting. According to Dr. Chalabi the Prime Minister (PM) 
stopped most fuel delivery into Sadr City, with the exception of 
kerosene. However, 400 containers of LPG, 8 oil trucks and 6 trucks 
carrying diesel have supposedly been delivered.  Another 55 trucks, 
containing various fuel products await entry via the checkpoints to 
Sadr City, according to the NSA. Dr. Chalabi will send a committee 
representative to Modafar Square to assist Coalition and Iraqi Army 
with fuel movement into Sadr City. 
 
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Learning in Sadr City 
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¶12. (SBU)  Mr. Tahseen al Shekhli, the FAQ spokesperson, claimed 
that ongoing kinetic activity and insurgent activity in Sadr City 
has prevented many children from attending classes. The rapidly 
approaching June high school diploma tests will be devastating for 
many students because many are ill prepared due to their inability 
to attend class. Chalabi suggested that the test be postponed, but 
Tahseen pushed further, arguing that the students did not receive 
enough education throughout the year and there simply wasn't enough 
catch up time before Chalabi's proposed testing date. Tahseen 
suggested that seats be set aside for former Sadr City students to 
attend universities. After a brief discussion, Dr. Chalabi asked his 
staff to invite the Ministry of Education to attend the May 6th 
meeting for further discussion on this issue. 
 
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Heavy Fuel Oil (HFO): Black Market vs Brick Factories - an April 22 
Report 
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BAGHDAD 00001396  003 OF 005 
 
 
¶13. (SBU)  Acting as mediator between a representative from the 
Ministry of Industry and Minerals (MIM) and several Nahrawan brick 
factory owners over HFO distribution, Dr. Chalabi will send a letter 
to the NSA recommending that the Nahrawan brick factories be 
supplied with HFO from Bayji. 
 
¶14. (SBU)  According to the Deputy General (DG) of Industry and 
Development from MIM, of 410 brick factories, 133 are operational 
and all 133 have consistently received HFO under MIM's authority. 
When asked about capacity, the DG said that if all 410 factories 
were operational, then 8 billion bricks could be produced in a year, 
employing a significant amount of laborers. Nahrawan alone can 
produce 30 million bricks at full capacity. When probed about fuel 
shortage, the DG conceded that at least 50,000 jobs are lost because 
of it. 
 
¶15. (SBU)  The brick factory owners defended themselves against 
accusations of selling HFO to the black market instead of using it 
to operate their facilities. (Note: The sale of HFO is more 
profitable than the sale of bricks. End Note) They countercharged 
the Ministry of Oil (MoO) with falsifying records, claiming that the 
owners picked up larger quantities of HFO than actual reality. In 
one example, the brick factory owner said that his factory was 
legally authorized 16 tankers of HFO from Bayji, but after picking 
up that allotment, he was issued a receipt totaling 24 tankers, an 
additional 8 tankers he claimed never to have received. The owners 
asked Dr. Chalabi to sequester HFO distribution charts from June 
2007 to March 2008 from the MoO to prove this point. 
 
¶16. (SBU)  According to the brick factory owners, SOMO sent a memo 
stating that they would supply only registered facilities with HFO. 
They strongly criticized MIM for not doing their due diligence to 
adhere to that request and to provide the factories with adequate 
fuel. The NSA representative suggested that MIM conduct a needs 
assessment or allow the factories to get their own supplies at 
Bayji. There were security concerns regarding the latter suggestion, 
but Dr. Chalabi decided to pursue that option primarily because it 
will be the quickest solution. Quick fixes are not unusual for Dr. 
Chalabi in his ombudsman role. 
 
¶17. (SBU)  Frustrated by the politics, the brick factory owners 
asked the committee to remove political parties from their 
Industries Union. Adhering to his committee's mandate, Chalabi ever 
so politely told them that was not within his jurisdiction. 
 
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The Little Engine that Could? 
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¶18. (SBU)  The rail from Basrah to Baghdad is and has been working 
for some time reported the General Director of Rail Service from the 
Ministry of Transportation at the April 22 meeting. While 
acknowledging that security is currently more problematic, he pled 
for greater utilization, particularly for commodities and oil 
movement. Primarily lobbying the Ministry of Trade, likely because 
the Deputy Minister complained earlier of transportation problems, 
he offered rail as a viable alternative to move food ration supplies 
from Um Qasr port in Basrah to Baghdad. Dr. Chalabi noted that Trade 
has been threatened by some criminal elements against using rail. 
(Note: Rumors have circulated that there is a "mafia-like" 
organization controlling the trucking industry. End Note) Dr. 
Chalabi questioned Transportation's loading and offloading 
capabilities, which the GD admitted was limited. Nonetheless, the 
Deputy Minister of Trade invited the GD to visit with she and the 
Director General of Ration Cards to discuss greater use of rail 
within her ministry. 
 
¶19. (SBU)  Dr. Chalabi commended the Ministry of Transportation for 
their continued commitment to move 1 million liters of kerosene per 
day. The GD seized that opportunity to lobby for an additional 1 
million liters of kerosene per day, which he claims the rails can 
handle, including on and offloading. Unfortunately, the Ministry of 
Oil was not represented at the meeting to respond. 
 
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Water Water Everywhere 
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¶20. (SBU) At the April 22 meeting, the BWA expressed serious 
concerns of a drought this summer, which will lower the Tigris River 
water levels and possibly halt the use of the Karkh Water Treatment 
Plant, a major supplier of potable water to Baghdad. If Turkey 
builds new dams, which is rumored, the BWA warned of grave 
consequences to water levels throughout all of Iraq, not just 
Baghdad. 
 
¶21. After several meetings, the committee has attempted to plan and 
prepare for water shortages during Iraq's hottest months. (Ref A, B 
and C) In the short term, the Amanat plans to distribute water to 
areas expected to face shortages over the summer months 
(July-September). The Deputy Mayor asked for a representative from 
 
BAGHDAD 00001396  004 OF 005 
 
 
the Provision of Services Committee to participate in future 
planning sessions to ensure coordination. The committee also 
reviewed some of the previously suggested longer-term solutions, 
including dredging the river near the Karkh Water Treatment Plant, 
and building a temporary dam. (Ref B and C) The BWA announced the 
formation of a committee/department to address the Tigris River 
dredging issues. Prepping for the planned dredging site around the 
plant is underway. One of the dredgers previously mentioned for use 
on this project could not be repaired, but a new dredger has been 
purchased. 
 
¶22. (SBU)  The BWA also discussed on April 22 their trip with Multi 
National Division-Baghdad (MND-B) to several proposed Reverse 
Osmosis (RO) sites. MND-B plans to lend several of these water 
purifying devices to the Amanat to help curb expected potable water 
shortages. Most importantly, the Mayor of Baghdad, recently assured 
BWA of their commitment to provide necessary resources to ensure 
adequate, clean water production and delivery. No details were 
offered so it's difficult to ascertain the level of commitment at 
this time. 
 
¶23. (SBU) Violations, mainly theft, against water pipelines 
continues to burden the potable water system. Violations must be 
stopped the BWA argued, but they also contended that part of the 
solution involved alternative resources for both drinking and 
irrigation water. The Ministry of Interior (MoI) is supposedly 
creating a "violations department" to address these issues. Dr. 
Chalabi suggested that the Amanat hire guards to be available 24/7 
to protect the major water lines running from the east to the west. 
He intends to send a memo to the Mayor of Baghdad to that end. The 
BWA seemed somewhat frustrated by Chalabi's proposal and reiterated 
that security alone will not resolve the issue. He pushed for 
alternatives and outright improvements to the irrigation water 
system. However, at that time no such solutions were offered. 
 
¶24. (SBU) At the following meeting, April 29, Baghdad Deputy Mayor 
Naem proudly delivered a report on water conditions in Baghdad. 
Municipal offices are currently looking into their needs and 
available resources, specifically available tankers for the summer 
months. He said the Rashid area is expected to face shortages and 
will need at least 349 tankers to compensate for those shortages. 
Nine sectors in Sadr City will require two shifts of potable water 
tankers per day. Each tanker will cost approximately 100,000 dinar, 
costing more than the Amanat claims to have. They are seeking 
assistance from the Mayor. 
 
¶25. After throwing darts at the wall to determine the number of 
tankers needed and the people served, Chalabi declared that the 
Amanat's plan would not meet estimated need. (Note: Need has never 
really been determined. End Note) Naem said the ministries were 
supposed to lend trucks to the Amanat. He asked the Ministry of 
Trade for the 150 tankers previously promised, but the Deputy 
Minister corrected his figures with a mere 30 tankers. Naem then 
said that the municipal offices could not be forced to lease 
vehicles. Chalabi scolded him for going into unnecessary details and 
reminded him of his task to provide potable water to the people. 
Feeling cornered, Naem then said that there were not enough sources 
of potable water to meet this demand - the tankers were not going to 
work. Clearly frustrated with Naem's tap dance, Chalabi took the 
lead, stating that he will send a memo to the Prime Minister and 
Council of Ministers asking for funding to supply 120 days worth of 
potable water. Chalabi ordered his staff to pull together the 
municipal offices to develop a coordinating distribution plan. 
 
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Will Electricity Meet its Production Goals this Summer? 
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¶26. (SBU)  On April 22, the Deputy Minister of Electricity said that 
previous electricity production projections, 5,400MW, 1,400MW of 
which are for Baghdad, are attainable only if the security situation 
improves. The Deputy Minister submitted a report of damages from 
kinetic activity in Sadr City. Several transformers are leaking oil 
and several low pressure cables have been damaged. The Ministry is 
sending repair crews to accessible areas, but some areas are still 
not safe enough to enter. It's not clear, if and when those areas 
will in fact become accessible. 
 
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Zain Gone Zany? 
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¶27. (SBU)  Concluding the April 29 meeting, a cellular phone 
consultant provided a doomsday report on an ongoing rift between 
Zain cellular phone provider and its former/current security 
provider. Over $15 million is owed to the more than 7,000 security 
forces protecting Zain's cellular network throughout the country. 
According to the briefer, if the money is not paid by May 13, the 
security forces are threatening to walk which will make the network 
vulnerable to looting and insurgent attacks. This will disturb not 
only the primary communications network, but also intelligence 
 
BAGHDAD 00001396  005 OF 005 
 
 
operations, essential service delivery and repair, etc. The briefer 
urged the Government of Iraq, Multi National Force-Iraq and the U.S. 
Embassy to intervene on the matter. The U.S. Embassy maintains that 
this is a matter between two private sector entities - no place for 
the U.S. Embassy.  Dr. Chalabi intends to send a memo to the Prime 
Minister on the matter. (Note: Dr. Chalabi owns some portion, if not 
all, of the security firm. End Note) 
 
Crocker