VZCZCXRO6991
PP RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #3185/01 2761316
ZNR UUUUU ZZH
P 021316Z OCT 08
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 9749
INFO RUCNRAQ/IRAQ COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 05 BAGHDAD 003185 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD ENRG ELTN EAGR PREF EAIR SCUL IZ
SUBJECT: SOUTHERN PROVINCES AIR CONCERNS WITH DPM AL-ISSAWI 
AND MINISTERS 
 
SUMMARY 
------- 
 
¶1. (SBU) On September 17-18, Deputy Prime Minister Rafa 
Al-Issawi hosted a conference on "Providing Services to the 
Southern and Middle Provinces" in Baghdad.  Governors and 
Provincial Council members from the nine southern 
provinces and Anbar directly presented their concerns about 
essential services to key line ministers and deputy 
ministers.  Ministries, in turn, provided rebuttals and 
explained their priorities and strategies to local officials. 
 Topics addressed included oil, electricity, transportation, 
trade, health, municipal works, education, planning, housing 
and construction, agriculture, industry, and displacement. 
DPM Al-Issawi ordered the ministries to submit written 
responses directly to him regarding concerns raised and 
unresolved during the conference.  The conference gave 
provincial officials a chance to give vent to grassroot 
frustrations over the sorry state of the delivery of 
essential services.  It also demonstrates a new willingness 
in Baghdad to grapple with these concerns.  The real test 
will be the results of efforts to follow up.  End Summary. 
 
MINISTER OF FINANCE: LEVEL OF SUFFERING IS INTOLERABLE 
--------------------------------------------- --------- 
 
¶2. (SBU) In opening remarks, Minister of Finance Bayan Jabr 
noted that, "Suffering has reached an intolerable level.  The 
level of services is too low and we need the cooperation of 
all the ministries and provincial governors to address the 
challenges."  He also emphasized the need for cooperation and 
sharing of experiences to reduce inefficiency.  "Mistakes are 
unavoidable, but we must keep moving forward.  We cannot 
raise the level of development until we raise the level of 
services." 
 
MINISTRY OF ELECTRICITY: WE ARE TRYING 
-------------------------------------- 
 
¶3. (SBU) Governors and Provincial Council (PC) chairs 
expressed grave concerns over the shortages of electricity in 
their provinces.  All participating provinces complained that 
the shortages were affecting water resources (as water pumps 
are often left without power), agricultural production, 
industrial output, and public health.  The officials, 
especially those from Muthanna, stated the supplemental funds 
they received were insufficient to repair the electricity 
grids.  The Governor of Basra complained that the province 
should not be responsible for national industries out of its 
provincial electricity allocation.  Anbar officials chimed in 
with a similar complaint, noting that one 
nationally-important factory took 45 MW to run.  "The 
Ministry of Industry should provide power for them, not the 
province."  Karbala noted it received thousands of visitors 
but had not a single generation plant.  Several others agreed 
that electricity should not be allocated by population but 
take other factors into account. 
 
¶4. (SBU) The Minister of Electricity acknowledged that the 
situation has been very difficult for the past two years.  He 
noted that lack of funds, staff, fuel, and security, combined 
with increased demand, corruption, slow repairs and poor 
performance of contractors all contributed to the shortages. 
"People who used to have one air conditioner, now have five." 
 On the positive side, he said that 1,000 MW of electricity 
production had been added since last year.  Three new 
projects will be completed this year, two more by next 
summer, and 17 other major electricity projects are pending, 
including the renovation of the Al-Hartha generation plant in 
Basra.  He conceded most of these projects would take at 
least one to two years to complete but expressed optimism 
that "big power companies are looking at Iraq."  The Minister 
also highlighted a recent deal with General Electric to 
supply generation, but explained marked improvements from 
that project would take at least two years to materialize. 
He asked the governors to assist by curbing local consumption 
and directing more funds towards fuel distribution.  The 
Minister also said he would increase generation to water 
treatment plants, especially in Babil, as well as increase 
micro-generation projects as stopgap measures until larger 
projects can be completed. 
 
PROVINCES SEEK OIL REFINERIES 
----------------------------- 
 
¶5. (SBU) The provincial officials highlighted oil-related 
problems, such as lack of LPG supply and storage, a problem 
which would affect their constituents in the winter.  All 
provinces expressed the desire to construct refineries in 
their areas to help address these supply problems, but 
complained that the Ministry of Oil's (MoO) ownership of land 
for such use complicates such goals.  (Note: All refineries 
 
BAGHDAD 00003185  002 OF 005 
 
 
are government-owned but there are provisions that might 
allow for the construction of privately-owned refineries. 
Some have been built, but are not operational due to a lack 
of crude oil.)  Maysan provincial officials were especially 
concerned about the availability of kerosene.  Anbar's 
Governor requested more fuel for gas stations on the border, 
and was concerned about insufficient numbers of gas stations 
on the main highway.  "Tribes are blackmailing travelers due 
to shortages," he complained. (Note: MoO owns some gas 
stations and licenses others to private operators, but is the 
sole provider of fuel to both.  Private operators often 
divert gasoline supplies, which are needed for both 
automobiles and electric operators, to obtain higher prices 
on the black market, which leads to fuel shortages at the 
official price and reduced hours.)  Muthanna officials 
complained they were not receiving enough asphalt for crucial 
road repair work and Diyala officials expressed concern their 
diesel fuel allocation was not enough to run the irrigation 
pumps, especially problematic given the severe drought in the 
province.  Several provinces also requested additional 
storage tanks. 
 
¶6. (SBU) A MoO Deputy Minister highlighted successes, such as 
the reopening of the Haditha refinery and its sourcing of 
crude oil via rail.  He explained that his ministry was not 
supplying the border gas stations due to previous tribal 
corruption at them.  Problems with LPG shortages in the 
province are a reflection of transport problems, rather than 
the MoO's supplies, specifically singling out the supply line 
between Basra and Amarah as problematic.  For example, he 
said, there is plenty of kerosene available in Basra, but 
truckers do not like to haul it to Amarah as the pay is low 
for such a short distance.  Regarding Muthanna's need for 
more asphalt, he explained the MoO was already supplying all 
available asphalt to the Ministry of Housing and 
Construction.  (Note: Asphalt shortages have always existed 
and will continue well into the future due to a lack of 
refinery capacity.)  On land issues, the representative 
suggested further discussions as heretofore dialogue on the 
topic had been limited. 
 
AN AIRPORT IN EVERY PROVINCE? 
----------------------------- 
 
¶7. (SBU) All provincial officials expressed a desire for an 
international airport.  (Comment: There is unlikely to be 
sufficient passenger and cargo traffic potential to support 
more than the few existing international airports in the 
near-to-medium term.  End Comment.)  The Governor from Maysan 
asked that the Ministry of Transportation eject Coalition 
Forces from Camp Sparrowhawk airfield, in order to transform 
it into a commercial airport.  On railways, the Anbar 
Governor suggested passenger trains, in addition to freight 
trains, use the rail line between Baiji and Haditha, and 
pressed for extending the line westward to Al-Qaim.  Babil 
also asked that its train station be reactivated.  Regarding 
roads, Wasit's representative suggested weigh stations be 
placed on trucking routes to prevent damage to roads in the 
province, and Diwaniyah officials suggested a limit on 
drivers to reduce highway congestion.  On maritime issues, 
Basrah's Governor complained that Navy War College graduates 
were not finding employment with the ports. 
 
¶8. (SBU) The Ministry of Transportation representative, after 
boasting of opening airports in Mosul and Najaf, stated an 
airport was not yet a realistic option for each and every 
province, but explained the ministry was considering an 
airport plan that could service Babil, Najaf, Wasit, and 
Diwaniyah.  He added that Iraqi Airways had successfully 
leased three more aircraft and that a "European airline" 
would soon begin a route to Iraq.  The representative 
emphasized improvements in the Iraqi rail system, but 
conceded the process of upgrading rails was proceeding 
slowly.  He said the ministry is planning a Najaf-Karbala 
line.  On ground transportation, the ministry has a fleet of 
360 18 wheel trucks and is working to "clean up" the trucking 
industry, he said.  Bus lines are running, he explained, and 
would increase in frequency and quality as demand increased. 
The representative added that 80 wrecks still need to be 
removed from Iraqi channels and that there is large demand 
for dredging work. 
 
PUBLIC DISTRIBUTION SYSTEM CONCERNS 
----------------------------------- 
 
¶9. (SBU) The provincial officials all expressed concern over 
limited deliveries of the Public Distribution System 
(PDS) to their areas.  Several provinces mentioned the tea 
component of the PDS basket as particularly problematic, 
levying specific allegations of corruption against tea 
distributors.  Provincial officials also complained that 
certain provinces, such as Anbar and Najaf, had 
 
BAGHDAD 00003185  003 OF 005 
 
 
disproportionately large amounts of sugar.  Other concerns 
included Najaf farmers experiencing payment delays from the 
Ministry of Trade for PDS items and Diwaniya's PDS flour mill 
facing maintenance problems. 
 
¶10. (SBU) The Deputy Minister of Trade said his ministry was 
exploring ways to reform the PDS system.  While he 
blamed global inflationary pressures for some of the supply 
problems, he stated the ministry was taking concrete steps to 
improve the transportation of PDS products.  He also 
emphasized that the GOI was renegotiating trade agreements 
that were halted in 2003, a step that would also help 
stabilize food supplies. 
 
TOO FEW HOSPITALS: STAFF, EQUIPMENT SHORTAGES 
--------------------------------------------- 
 
¶11. (SBU) On health, the basic issue for the provinces was 
the need for new hospitals, equipment, and specialized 
medicine.  Some officials complained that while they received 
initial funding and sites for hospitals, not enough resources 
were available to complete the projects.  Land use issues 
were also creating delays.  Basra officials recounted having 
purchased medical equipment, but not having enough staff or 
subsequent resources to maintain it.  Officials from Anbar 
asked that the MoH facilitate a medical school in a rural 
area, reflecting their concern that doctors trained in the 
cities do not leave the cities.  Babil Province asked for 
more assistance to fight cholera through providing more 
nurses.   Anbar noted the need for a women's wing for 
hospitals with female doctors, midwives and facilities 
pre-natal care. 
 
¶12. (SBU) The Minister of Health (MoH) acknowledged shortages 
in medical practitioners and explained that his ministry was 
adopting a new strategy to develop human resources and place 
them in the "right areas."  The Ministry of Education was a 
partner on this initiative, he said.  He also asked the 
provinces to include specialized medical clinics in their 
budget requests, as the MoH budget could not support this 
area.  He also conceded there was a disproportionately low 
number of doctors in the provinces.  In response to the 
complaints about equipment, he acknowledged that there had to 
be better provision for spare parts and maintenance 
personnel.  "Every day a piece of medical equipment is not 
working costs $435."  He was also trying to get a straight 
answer on specialty clinics.  "How many specialists does a 
cancer clinic need?  I don't know," he said.  On midwife 
training, the Minister was supportive, noting that 23 percent 
of births currently occur outside hospitals. 
 
PROVINCES BLAST MINISTRY OF MUNICIPALITIES 
------------------------------------------ 
 
¶13. (SBU) During the session related to Ministry of 
Municipalities (MoM) issues, the governors and PC chairs 
complained about broken sewage systems, lack of solid waste 
disposal, and the inability of the MoM to successfully 
execute projects.  The PC chair from Muthanna cited a 60 
percent shortage in drinking water, but said the water 
systems could not improve without repairing the sewage system 
first.  The PC chair from Maysan estimated only 15 percent of 
the sewage system was functional in his province, with Babil 
officials claiming only 6 percent sewage functionality and 
highlighting the problem of cholera in their province. 
Muthana, Basra, and Anbar officials all cited lack of 
chlorine as a significant problem.  The Governor from Basra 
specifically complained that heavy pollution in the Tigris 
and Euphrates rivers severely affecting his province 
downstream.  Officials from Dhi Qar, Karbala, and Anbar 
discussed problems with solid waste disposal, with Anbar's 
Governor stating that poor trash collection constituted a 
significant threat to security.  They all asked for recycling 
or disposal assistance from MoM.  Both the Governor and a 
Provincial Council member from Basra loudly criticized the 
MoM, accusing its managers of treating Basra in a "political" 
manner and complaining about the ministry's DG for sewage. 
"He is the worst DG in government," the PC member complained. 
 Anbar's Governor questioned why the MoM has so much 
authority for essential services in the provinces.  "If we 
are trying to decentralize, why not give us more authority 
for projects?" he asked.  Both Basra and Muthanna officials 
complained about the MoM starting projects, but failing to 
see them through to completion.  The Muthana PC chair also 
cited high land prices, determined by the MoM, as impeding 
local projects.  "If you are going to set the prices," he 
said, "at least subsidize them when we implement a 
development project." 
 
¶14. (SBU) The MoM representative claimed the ministry spent 
270 billion ID on sewage-related projects in the southern 
provinces this year.  He listed several projects for each 
 
BAGHDAD 00003185  004 OF 005 
 
 
province that have been approved or pending funding, but 
await subcontracts. 
 
EDUCATION 
--------- 
 
¶15. (SBU) The governors and PC chairs argued for more 
provincial authority on education issues, given high 
student-teacher ratios and large number of dilapidated 
schools.  The Najaf PC chair cited an average of 90 
students per teacher in grades 1-6, calling this problem 
"catastrophic."  The Diyala Governor said there were 30 
schools in his province "falling apart" and requiring 
security guards.  Basra's PC member claimed scores for 
students were much lower than before and called for better 
testing standards.  Anbar's government emphasized how 
security affects education, explaining that many students in 
his province missed a nationally-administered English 
test due to a security curfew in place. 
 
¶16. (SBU) The Minister of Education agreed there were 
weaknesses in Iraq's educational system, and argued for 
more resources to improve it.  We need 10,000 more teachers 
and 10,000 night guards to protect schools, he said.  In 
addition 2,500 schools require refurbishment, 150 of which 
are constructed of mud.  He complained that his ministry 
spent a large amount of money refurbishing schools that did 
not actually require such work and accused "incompetent" 
companies of performing below standards on many contracts. 
More coordination was also needed with the provinces, he 
explained, also highlighting land ownership issues as an 
impediment to building more schools.  "We have grants from 
Kuwait to build, but we need land," he explained.  On student 
aptitudes, the Minister said many night school graduates were 
unqualified to graduate, stating,  "A lot of these guys 
cannot even read or write." Explaining the need for 
incentives, the Minister also stated colleges and 
universities with the highest test scores should receive the 
most national scholarship money. 
 
BUDGET EXECUTION DELAYS 
------------------------ 
 
¶17. (SBU) Accepting his ministry's blame for some of the 
delays in provincial budget execution, the Minister of 
Planning, Development, and Cooperation (MoPDC) supported the 
provinces' requests to have more authority in contracting. 
"If a ministry cannot get a project done quickly, let the 
governors take over," he suggested.  He said the MoPDC was 
creating a blacklist of contractors that have underperformed, 
and asked the provincial officials for assistance in 
identifying such companies. 
 
HOUSING AND CONSTRUCTION 
------------------------ 
 
¶18. (SBU) During the session on Ministry of Housing and 
Construction (MoHC) issues, provincial officials listed 
many housing, road, and bridge projects in their areas that 
were behind schedule.  Officials from both Najaf and 
Diwaniyah complained about lack of tar and asphalt for road 
projects.  Maysan and Babil officials complained that heavily 
loaded trucks were causing extensive road damage and 
suggested implementing scales to regulate such traffic.  The 
Diwaniyah PC chair recounted how a residential center project 
awarded by the MoHC in 2005 had not yet even finished its 
foundation stage yet, and asked that the MoHC provide 
timelines for its projects.  The Anbari Governor asked the 
MoHC for more residential projects and the Governor from 
Basra complained about disproportionately MoHC funds 
benefiting his province. 
 
¶19. (SBU) Minster for Housing and Construction Bayan Diyazee 
explained that the MoHC considers projects by first 
weighing them against national strategic goals and then 
evaluating feasibility.  She explained the MoHC was 
implementing 30 road and bridge projects throughout the 
country, but conceded her ministry had a shortage of 
engineers and equipment, given the large demand.  Diyazee 
explained that other provinces, such as Wasit and 
Diwaniyah, receive more funds than more heavily-populated 
Basra due to the highway projects in those provinces.  She 
claimed, however, that these projects would benefit Basra, 
and said the MoHC had a total of 59 projects underway in the 
province.  (Note: Currently the MoHC is undertaking 24 
housing projects in 14 of the southern provinces.  One 
project in Basra (504 units) is some 34 percent complete; a 
new one for Al Anbar was just approved under the supplemental 
budget; and the housing project in Diwaniyah has been plagued 
by a defaulted Polish contractor that has now been removed. 
A new contractor has been awarded the project as well as an 
additional $7 million for project completion.  The capacity 
 
BAGHDAD 00003185  005 OF 005 
 
 
of the Ministry is limited and will keep falling short of 
Iraq's infrastructure needs for roads, bridges, municipal 
buildings and housing.  End Note.) 
 
AGRICULTURE REFORMS NEEDED 
-------------------------- 
 
¶20. (SBU) Provincial officials lamented the state of 
agricultural, requesting more support for animal feed and 
equipment from the Ministry of Agriculture.  The PC member 
from Muthanna requested 25-50 percent subsidies for 
purchases of spray aircraft, irrigation equipment, and 
greenhouses.  Diwaniyah officials requested more chicken 
feed and the Anbar Governor asked for more veterinary 
services and laboratory testing for meat.  Dhi-Qar provincial 
officials said the GOI needs to undertake a desalination 
initiative. 
 
MORE INDUSTRY NEEDED 
-------------------- 
 
¶21. (SBU) The governors from Basra and Anbar asked the 
Ministry of Industry and Minerals (MoIM) to focus more on 
their provinces, while MoIM Deputy Minister Sami Al-Araji 
explained his ministry's initiatives in those areas.  The 
Governor from Anbar asked Araji for permission to cut off 
power to the Al Qaim cement factory, a state-owned 
enterprise that came under private management in July.  "It's 
in the contract that the foreigners will provide 
their own electricity, but they are still picking off the 
national grid," He explained.  He also suggested MoIM 
establish a water-bottling facility.  Araji said it was too 
soon to solve the electricity issue with respect to the 
cement factory, as the contract between MoIM and the foreign 
operators allowed for a six month grace period on private 
electricity generation.  Addressing Basra officials directly, 
Araji said his ministry had "big plans" for the province, and 
shared MoIM's vision to build a "world class" petrochemical 
industrial center there. 
 
DISPLACEMENT ISSUES 
------------------- 
 
¶22. (SBU) Dhi-Qar officials expressed concern over the large 
number of internally-displaced persons (IDPs) in the 
province, and said this was compounding the 64 percent 
unemployment rate there.  Minister of Displacement and 
Migration (MoDM) Sultanov thanked the provinces for their 
support in housing IDPs and supporting the GOI's efforts to 
establish rule of law throughout the country.  He asked for 
patience from the provinces as the MoDM finalizes its 
national strategy for the return of IDPs. 
 
COMMENT 
------- 
 
¶23. (SBU) The conference, broadcast live, was the first such 
forum on essential services for these provinces; it followed 
a similar, but less well-organized, session for the northern 
provinces in August.  While exchanges at times became heated, 
the overall tone of the dialogue remained constructive and 
cordial.  We are encouraged by DPM Al-Issawi's engagement and 
outreach to the provinces.  The real measure of the 
conference's success, however, will be to what extent the DPM 
keeps his promise that provincial concerns will not fall on 
deaf ears and that ministries will be held accountable for 
their shortcomings.  End Comment. 
CROCKER