Corruption is rife! Six years to build a short road in Karbala

Reconstruction was the most corrupt sector

KARBALA, Iraq - Construction of a road next to Imad al-Moussawi’s house in Karbala started six years ago. But it still isn’t finished. “It’s not yet fully paved,” al-Moussawi says. “Parts were paved but other parts were not. The same thing happened with the roundabout in the middle of this road. It’s just been fenced off with iron bars and the centre has become a dumping ground for all kinds of rubbish.”

Al-Moussawi lives in the working class neighbourhood of Ghadeer. But this is not the only project in the relatively prosperous town of Karbala that remains uncompleted. A wide number of projects in various areas – roads, bridges, sewages systems – are unfinished. "We see these unfinished projects all around us and we worry about the money that is being spent on these failed projects,” al-Moussawi told NIQASH. “If that money had been spent to help hungry, poor people it would be much better.”

Apparently a lot of the projects are not being finished because the city is running out of money – that is despite it being a prosperous metropolis which, as the site of some of the most important Shiite Muslim shrines in the region, draws millions of tourists every year. The delays in construction and other projects have a major impact on the city’s all-important service sector.

“Karbala won’t be able to sign any new contracts for new services or construction projects until 2016,” Hussein Shadhan, a member of the provincial council's religious tourism committee, said. “All of the current year’s budget will be used to finalize projects entered into previously.”

In 2012, Karbala received around IQD 200 billion (around US$167 million) from the national budget and in 2013, the city got IQD237 billion (around US$200 million). In 2014 Karbala expects to get about IQD300 billion (around US$350 million). The city also gets extra money from the government to cover expenses that it has around providing security and services to the millions of visitors it receives from Iraq and the region during major religious occasions. For example the Iraqi government gave the city an extra IQD100 billion dinars (US$83 million) to cope with the Ashura festival.

And the reason why the current projects are not being completed is because the government still owes contractors billions of dinars, Shadhan says. So naturally the contractors are unwilling to finish anything.

“Some of the projects in Karbala date back to 2008,” Shadhan told NIQASH. “And contractors dragging their feet has become a permanent characteristic of construction in Karbala.”

It is hard to know who is to blame for the current state of affairs. Politicians involved happily blame one another for the problems.

Mohammed al-Moussawi, former head of the provincial council, said funds had been mismanaged and blamed Karbala’s former governor, Amal al-Din al-Hir, for not spending the money carefully enough.

Meanwhile al-Hir said that the contractors were to blame for delays in projects and that there had never been enough money in the budget in the first place.

Poor planning is the main reason for the delay, added another council member and former head of the council’s economics committee, Tariq al-Khikany. “There are also some serious problems with some of the contracts signed years ago,” al-Khikany said. “So the local government doesn’t have the authority to hold contractors who do not fulfil their contractual obligations accountable.”

The only sanctions that the local council can impose on contractors are to withdraw the project and give it to another contractor. “And this doesn’t help anyone,” al-Khikany said. “In fact it can actually work in the interests of the contractors who have defaulted.”

The local council should be given the authority to impose sanctions on contractors, he says. Because often the contractors who are not completing their work are the ones who signed contracts with federal ministries in Baghdad, al-Khikany explains. “The contractors and companies have greater freedom to do what they want because they are so far away from Baghdad. And they know the local authorities cannot hold them to account.”

It’s not about the money, says local professor of economics, Odeh Hussein. “Karbala is a comparatively small province and if the money it was allocated had been used sensibly, the province would have made great progress.”

The problem lies in the fact that most of the contracts signed by contractors in Karbala have a flaw, Hussein explains. No penalty is defined if the contractors do not fulfil their obligations. So that means they are able to delay or postpone their work as they wish. “Now half of the projects are under way and the other half sits unfinished,” Hussein notes. “And because of the flaw in the contracts, neither the local or federal government is able to do anything about it.”

Hussein then gave the example of the equally small province of Maysan in southern Iraq. They were able to make a real breakthrough in the area of reconstruction and service provision because of different methods of contracting.

There is also the issue of corruption, the professor says. Iraq came 171st out of 177 countries on Transparency International’s Corruption Perceptions index. The index “ranks countries based on how corrupt a country’s public sector is perceived to be”.

Most Iraqis believe that a lot of the construction, or other, projects are given to companies that either don’t exist or which are incompetent – often those companies are seen as being close to decision makers and high ranking officials. “All of this has an impact,” Hussein says. For one thing, the slow pace of progress makes investors less likely to want to put money into Karbala.

And Hussein feels that the construction sector must be one of the most corrupt. People often speak about bribes offered to decision makers. Additionally a lot of Iraq’s wealth has been spent on construction projects over the past decade yet somehow nothing is ever achieved.

“It would be safe to assume that reconstruction was the most corrupt sector because of the amount of money spent on this sector,” Hussein told NIQASH.