Lack of security in Iraq wasting US aid-inspector

WASHINGTON, Jan 18 (Reuters) As much as 15 percent of 21.8 billion dollars in US reconstruction aid for Iraq may have been wasted largely because of the poor security situation, the US inspector for rebuilding projects said today.

The revelation comes as President George W Bush planned to send 21,500 more US troops into Iraq and to ask Congress for another 1.2 billion dollars for rebuilding and jobs programs as part of his strategy to end sectarian violence in Iraq.

''The potential loss could be 10 to 15 per cent, but we are waiting until we finish the large analysis,'' Stuart Bowen, the special inspector general for Iraq reconstruction, told the US House of Representatives Armed Services Committee.

That figure was only an estimate and ''it very well could be higher,'' he told Reuters during a break.

Bowen said the analysis included examinations of the three largest contractors hired for reconstruction projects, KBR Inc., Bechtel Corp. and Parsons Corp, which he expected to be completed this year.

Representative Ike Skelton, chairman of the panel and a Missouri Democrat, criticized the lack of progress in increasing the electricity supply -- a constant complaint among many Iraqis -- and that oil production has fallen short of set goals.

''The story on reconstruction is that it is not a total failure, but it is not by any means a success,'' Skelton said. ''We must do better.'' Bowen said audits by his office had so far saved or recovered 50 million dollars and has identified another 106 million dollars that potentially could be recovered. But he noted that oversight was difficult because of the security problems.

''Just traveling outside the Green Zone is such a difficult task that it requires significant advanced planning and trips are often canceled,'' Bowen said, referring to the heavily fortified compound where the US embassy is located.

Improving security was essential to carrying out the reconstruction effort, said David Walker, comptroller general of the United States, who heads the investigative arm of Congress.

''It has a pervasive effect on the ability to build capacity, on the ability to engage in reconstruction activities and the ability to maintain and protect whatever reconstruction has occurred,'' he told lawmakers.

Walker also said that security conditions continued to deteriorate despite the increased number of trained and equipped Iraqi forces. He added that he was still trying to get information from the Defense Department on the readiness of those troops.

Reuters LL DB2352