A forest of gleaming pylons, eight large generators and a collection of fuel tanks languish in a rural stretch of land north of Baghdad. Equipped with top-quality machinery from General Electric, part-funded by American taxpayers, the Qudas power plant should be generating more than 600 megawatts of power.

Instead, the facility stands almost idle because there is not enough fuel to power the generators, three of which have broken down. Kareem Waheed al-Aboudi, the Electricity Minister, has $1 billion (£500 million) at his disposal to spend on Iraq’s decrepit electricity network. But the leading international companies invited to rebuild the infrastructure are deterred by the threat of violence.

“We have lost about 1,100 people killed or kidnapped since June last year,” the minister told The Times.

Iraq’s vast oil reserves are being used largely for exports to create government revenue, rather than helping to power the country’s generators that are required to run the oil distilleries, which in turn produce the sort of fuel that power plants need to function.

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“This is the main issue that should be eliminated in order to increase power generation,” said Mr al-Aboudi. In addition, he wants companies such as GE, Alstom and Siemens to construct more power plants in Iraq. But Mr al-Aboudi said that he was aware such groups might choose safer markets such as China and India where demand for their expertise is also high.

“Before I had the money and people were chasing me to get a contract. Now I am chasing them to give them a contract,” Mr al-Aboudi said. He will spend $1.5 billion on the sector this year but has a further $1 billion if the right companies agree to participate. “We have money, we have fuel, we have people. We don’t have security but we have security agencies.”

A lack of electricity is one of the biggest complaints heard from Iraqis, some of whom say that they get only one or two hours of power a day. “I am angry at the Government because it lies, saying that electricity will be better next year but instead it gets worse,” said Ali Mustafa, 36, a Baghdad cook.

Power distribution was distorted during Saddam Hussein’s time. Most of Iraq’s natural oil and gas resources are located in the north and south of the country but the former President channelled them to Baghdad, ensuring that the capital had ample power while the rest of the country suffered.

There was also massive underfunding of Iraq’s power plants, sub-stations, pipes and transmission lines, which were falling apart. Adding to the crisis, the March 2003 invasion caused extensive damage to the electricity network. Multibillion-dollar reconstruction efforts have since been hampered by insurgent attacks and crippling security costs, which suck up large swaths of cash.

The Electricity Ministry, with help from the US-led coalition, has succeeded in bringing the level of power generation back to 5,500 megawatts – above prewar levels – which averages at 12 hours per day.

It is also distributing the supply more evenly so while people in Baghdad moan that they have less power than before the March 2003 invasion, people in other provinces such as Najaf and Anbar enjoy an increased flow.

The Electricity Minister, however, wants to supply 24 hours of power to everyone by 2010. To achieve this, he needs the Oil Ministry to invest more money in its own infrastructure.

Flush with funds

— Iraq plans to spend $10 billion (£5 billion) of this year’s oil revenues on reconstruction projects, up from $6 billion last year

— But most ministries are unable to spend such vast sums. Last year some ministries spent as little as 15 per cent of the funds allocated

— The threat of violence against employees and foreign contractors, a shortage of skilled workers who have fled Iraq and bureaucratic inefficiency are responsible for the underspend

— Provincial governments have been much more successful at spending the money allocated to them for local projects

Sources: Congressional Budget Office; Iraqi Government; Times archives

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