Select Committee on Defence Minutes of Evidence

Annex A



  The UK Government has pledged a total of £544 million for reconstruction in Iraq from 2003 until 2006. The UK has disbursed over £530 million.

  DfID has committed over £417 million to specific projects since March 2003. Over £352 million has been disbursed, which includes over £100 million for humanitarian relief and a £70 million contribution in 2004 to the International Reconstruction Fund Facility for Iraq—trust funds managed by the UN and World Bank. An additional £67 million is our attribution of EC contributions to Iraq (19%).

  DfID's £45 million programme in 2006-07 focuses on:

    —  Economic reform.

    —  Infrastructure: improving power and water services in the south.

    —  Governance and institution building in Baghdad and the South.

    —  Support for civil society and political participation.

  DfID also works through the international system, as a member of the donor core group, and as a major contributor to the UN and World Bank Trust Funds for Iraq. DfID is working with the Iraqi Government, the UN, the World Bank, the US and other donors to achieve a more coordinated and Iraqi-led reconstruction and development effort.

Programme overview

    —  £40 million infrastructure project, improving power and water services in southern Iraq.

    —  £20.5 million to build the institutional capacity of the four southern governorates and to support private sector development in the south.

    —  £6.7 million to strengthen independent broadcasting in the south.

    —  £13 million package of support to assist Iraqi government on economic reform issues: 2006 budget, on agreeing $436 million assistance package with IMF, and negotiating Paris Club debt deal. New two-year programme has recently begun.

    —  £13.25 million support to the Centre of Government Programme to improve machinery of Government assisting the Prime Minister's office and the Government Communications Directorate (GCD). Will help achieve continuity in the transition to the new elected administration.

    —  £5 million Civil Society Fund is supporting the development of legitimate and representative Iraqi NGOs; £7.5 million Political Participation Fund is encouraging poor and marginalized sections of Iraqi society to engage in the political process.

  DfID is also managing a Global Conflict Prevention Pool-funded project to strengthen administration in the Ministry of Interior.

  DfID works closely with other government departments in our reconstruction work. This includes working together to communicate our achievements and impact to the Iraqi, UK and international media.


  The PRT's objective is to enable enhanced provincial development with maximum local ownership, through co-ordinating UK (civilian and military) effort and wider US and Danish programmes. The broad UK aim for the PRT is to ensure the legacy of the UK's reconstruction work in Southern Iraq, to assist a smooth transition and to optimise the impact of international assistance. The PRT focuses overwhelmingly on Basra, but incorporating a "light-touch regional role".

  The PRT has three main areas of focus:

    —  governance;

    —  rule of law; and

    —  economy/infrastructure.

  The PRT reports to the National Co-ordination Team in Baghdad, locally to HM Consul General in Basra, and to Departments in Whitehall via the Post Conflict Reconstruction Unit. The UK's effort is jointly owned by DfID, FCO and MoD and co-ordinated via the Cabinet Office-chaired senior officials group on Iraq.


    —  A more detailed note on the Provincial Reconstruction Team is below.

    —  More detail on DfID's programme is supplied in the DfID Progress Report (Ev 24).

    —  Additional information about DfID's programmes, including our Country Assistance Plan for Iraq, can be found at:



  The broad UK aim for the PRT is to ensure the legacy of the UK's reconstruction work in Southern Iraq, to assist a smooth transition and to optimise the impact of international assistance. The PRT expects to enable enhanced provincial development with maximum local ownership, through the combined application of UK (civilian and military) effort and wider US and Danish programmes.

  The PRT's work focus is overwhelmingly on Basra—but its ambit incorporates a "light-touch regional role". It contributes to HMG's planning for transition in Southern Iraq and participates in the Southern Iraq Steering Group. The PRT serves to act as a hub for multi-national capacity-building; to exchange best practice; and to promote coherence and efficient use of resources as an integral part of a UK comprehensive approach in southern Iraq, by encouraging: joint civil-military effort; focused use of assets and money; coherence among other regional players; targeted application of donor resources through the Southern Iraq Steering Group.

  The PRT is helping to develop and support the Iraqi Provincial Development Strategies, which will guide priorities for international support to Iraqi institutions at a provincial level. The PRT's work has three main areas of focus:

    —  governance;

    —  rule of law; and

    —  economy/infrastructure.

  The PRT reports to the National Co-ordination Team in Baghdad, locally to HM Consul General in Basra, and to Departments in Whitehall via the Post Conflict Reconstruction Unit. The UK's effort is jointly owned by DfID, FCO and MoD and co-ordinated via the Cabinet Office-chaired senior officials group on Iraq.


    —  Improve the delivery of UK civil and military assistance to southern Iraq by planning, co-ordinating and sequencing existing and future HMG and international partner reconstruction activities and funding (including US).

    —  Develop the capacity of local government actors (eg Provincial Development and Reconstruction Committees) in southern Iraq, especially Basra Province, to lead provincial development, where such efforts are welcome, consistent with local needs, priorities and aligned to existing processes.

    —  Strengthen the links between Central and Provincial governance structures.

    —  Facilitate the transfer and handover of programme activity from a UK military to a UK civilian lead where this remains consistent with HMG objectives for southern Iraq.

    —  Identify and advise coalition and multilateral partners on opportunities to participate in reconstruction and development activities in southern Iraq, in support of the UN lead on donor co-ordination.

    —  Act as a mechanism for HMG and international partner engagement in Southern Iraq.


  The PRT achieved Initial Operating Capability in May 2006. The US have particularly appreciated the work of the UK-led multi-national PRT Team to get the PRT in Basra off to a swift start. The PRT has submitted a baseline assessment of the situation in Basra and a work plan to address priority activities for approval by the National Co-ordination Team, which will result in the award of Full Operating Capability shortly.

  The benefits from taking such an integrated approach are already being seen in enhanced information sharing and alignment of projects and programmes. The UN and other local partners view the PRT providing a coherent delivery mechanism for international donor support to the Iraqis. The PRT has made progress in pushing forward governance work in a coherent manner—an essential part of delivering lasting security and economic growth—including through facilitating workshops in Amman, Beirut and Bahrain.


  The PRT is supported by the UK, US and Danish governments and led by the UK. There is a UK civilian Team Leader and three Deputies (one US, one Danish, one UK military) plus a range of UK, US and Danish government and contractor staff.

  The PRT staff complement continues to grow in line with its expected capacity. The PRT aims to have durable capacity in each of its work-strands. Actual staff numbers in Basra fluctuate according to the security situation, availability of local staff, military roulement, leave schedules and overseas commitments. Currently the PRT has a staff list of approximately 20 UK-funded staff ***, 13 US-funded staff and three Danish staff. Various of these positions have yet to be filled. Each partner government covers salaries and life support costs for their staff.

  The PRT will have access to project financing through existing donor programmes: DfID's Governance Development Fund (£1.9 million), which covers governance and private sector development work, USAID's governance programme, managed by Research Triangle Institute (funding amount under review by US), and Denmark's agriculture and irrigation programme (funding amount under review by Denmark). In addition, the US are providing US$15m per PRT from US supplemental funding for general programme expenditure—these funds are expected to come on-stream around October 2006.

  The PRT is considering how best to allocate this funding to the priorities identified in its work plan. The PRT can also make recommendations for other project funding. In particular, it will be able to bid, via its military components, for contributions from MND(SE)-managed funds, including the US CERPS funds.


  Whitehall Departments asked the Post Conflict Reconstruction Unit (PCRU) to support the UK's efforts to establish and lead the PRT in Basra. PCRU is a cross-government Unit jointly-owned by the FCO, MoD and DfID; and on operational issues supports UK country strategies, as directed by Cabinet Office-chaired senior official committees. PCRU acts as a service provider to provide support, including expert personnel, technical advice, IT/comms/logistics and some short-term funding, as well as processing day-to-day PRT issues in London.

  PCRU is funding the provision of the PRT Team Leader, two support managers and a secure IT/comms package to the end of 2006, at an expected cost of approx £1 million, pending clarification by Departments of future funding mechanisms. PCRU facilitated a scoping study of the requirements to establish the PRT in March/April 2006 by PCRU core staff.

  Departments are also considering where else PCRU can add value to HMG's efforts in Iraq, including in addressing the situation in Basra, in line with its mandate to facilitate integrated assessment and planning, and deliver operational capability for conflict stabilisation efforts.



  Iraq faces major challenges in providing adequate service delivery. Power and water infrastructure are in a poor state. Power generation is currently around 3,500MW, but demand exceeds 8,000MW. Around 60% of the population have access to clean and reliable sources of water; this figure includes bottled water.

  Despite the significant expenditure on reconstruction since 2003, progress is perceived to be poor for a number of reasons:

    —  aging infrastructure that continues to fail;

    —  inappropriate technology provided as part of reconstruction packages;

    —  lack of Iraqi ownership; and

    —  insecurity.

  Iraq needs to switch from teasing performance out of crumbling infrastructure into a more dynamic, higher investment mode. The GoI must set out a clear and credible plan for reform and investment in power and water infrastructure and commit funding to implement them. The World Bank has a strong track record in these areas. International financial institutions like the World Bank, major donors with soft loans (like the Japanese and Saudis) and private sector investors must also commit to implementing that plan.


  Since March 2003 DfID has spent £78 million on infrastructure improvements in southern Iraq.


    —  Rehabilitation of 2,000 km of high voltage power lines and refurbishment of petrol stations, tankers and generators.

    —  Refurbishment of the control room at Khor Az Zubayr power station which brought 50MW back online.

    —  Repair of the 132KV transmission line from Hartha power station to parts of Basra city, which improved electricity supplies to 1.5 million residents.


    —  Construction of a skills-based water training centre, to support the southern Iraqi water directorates.

    —  Replacement of 800 km of water mains across the south.

    —  Construction of approx 9,900m of piped main drainage plus mains connections to 830 houses, connecting 8,000 inhabitants to main sewers.

    —  Installation of new sewage treatment facilities at Mina Prison, Basra, greatly improving the facilities for 400 (remand) inmates.

    —  Repair of 5,047 leaks across the four southern governorates.

    —  Provision of technical advice for a major sewage installation in Al Amarah, providing up to half the city's population with access to a piped system and replacing open sewage channels.

  The main challenges to DfID's infrastructure work are the security situation and weak capacity of local partners. ***

  Despite these challenges, we anticipate that the following outputs will be delivered over the next 12 months:


    —  Completed (week commencing 26 June): reblading of damaged turbines at a power plant in the south. Ministry of electricity to install the new blades shortly, adding roughly 50 MW and securing the existing 30 MW.

    —  Installation of a gas compressor unit on the pipeline from Ramallah to Najaf will increase gas available to Hilla, Najaf, and Samawah power stations, lifting production by 20MW and securing an additional 30 MW.

    —  Stabilising a chimney at a power plant in the south will secure 170 MW.


    —  Refurbishment of a reverse osmosis unit will provide drinking water for 250,000 people in Basra.

    —  Construction of three new water towers in one of the most poorest and difficult areas of Basra, will benefit a further 250,000 people.

World Bank

    —  DfID is also funding a World Bank adviser in Baghdad to speed up the Bank's engagement in oil and electricity issues and to help GoI develop a plan for the energy sector.


  Central and local government capacity—both to deliver, and to communicate policy messages—is weak. This is the combined result of decades of authoritarian rule and the removal of experienced officials through deBaathification. DfID is working to build institutional capacity in Baghdad and in the four Southern Governorates of Basra, Dhi Qar, Maysan and Muthanna, with projects totalling over £30 million. Our projects seek to build new structures and systems of transparent and democratic government that meet the needs of the people. The challenges of building the machinery of government from scratch are made even more difficult with regular changes in leadership and consequential staff changes. The new government promises a period of stability in which greater traction on capacity building could emerge.

What DfID has delivered

    —  We have three consultants working with PM's Office and Government Communications Directorate. Includes two Arabic speakers. They have helped to:

    —  Set up PM's Office.

    —  Establish regular and more effective meetings of the Council of Ministers.

    —  Create Government Communications Directorate staffed with 40 trained professionals.

    —  Set up all three of these from scratch including paying for building refurbishment and office equipment.

    —  The Government Communications Directorate in particular has been very busy over the past few weeks. It has:

    —  helped with the new government inauguration process;

    —  produced a number of speeches for the new PM, prepared 620 posters for promoting the new unity government; and

    —  produced 500 communications packs describing the new government formation for the media and government departments, and developing a media training programme for key governmental staff.

    —  In the Southern Governorates, we have:

    —  Supported Iraqi-led draft Strategic Development Plans for the four governorates. Prepared recently on a DfID-sponsored study tour to Lebanon.

    —  These Plans provide a basis to produce 2007 provincial budgets, to unlock central funds and thereby establish a sustainable budgeting process. Approach endorsed by Ministries of Planning and Finance.

    —  Provincial Development Committees established in all four governorates.

    —  Co-ordination between the Provincial Council, the Governor's Office, and the technical Directorates improved.

    —  Refurbished Governorate offices and resource centres.

    —  Trained over 50 Southern Governorates officials in budgeting and planning processes.

  The major challenge to our work on improving government effectiveness has been the lack of a permanent, strong Iraqi Government. Effective capacity building needs dedicated leadership to lead the change process. New PM appears to have this, but he too will be shackled by political balancing within and amongst key government ministries, so the process of change is likely to be tempered by political realities.

To be delivered over next 12 months

    —  In Baghdad: in the PM's Office, Council of Ministers Secretariat and Government Communications Directorate we will help to:

    —  agree staffing, reporting structure of the three three central institutions;

    —  ensure effective individuals in posts; and

    —  provide effective training and capacity development.

    —  In the Southern Governorates, we will help Provincial Councils to:

    —  Ensure that effective Strategic Development Plans are produced.

    —  Help establish a more needs based budget for 2007.

    —  Support the link with Central government Ministries to ensure that they are responsive to provincial budget.

    —  Begin to build capacity for implementing the budget.


  Iraq's economy has been devastated by three decades of conflict, international trade sanctions and a corrupt, centralised authoritarian regime that dominated all aspects of the economy. Since the 1970s, the economy of Iraq has been dominated by oil production. In 2005 the International Monetary Fund (IMF) estimated that oil export revenues accounted for 75% of the economy. A large share of oil means a large, patronage-based state with very little accountability to ordinary people. Iraq's 28 million people add comparatively little value to their oil revenues. There is very little non-state formal employment, and male youth report rates of "unemployment"" in excess of 60%.

  However, Iraq is not a poor country. With strong leadership of the necessary reforms it should be able to fund its own reconstruction and determine its own future. Furthermore the economy has rebounded quickly. Iraq's GDP is projected at $29.3 billion in 2005, up from $18.4 billion in 2002. The IMF expects Iraq's economy to grow by 10.4% in 2006. DfID has been supporting economic reform in Iraq since 2004. DfID's Economic Reform Programme and our support for public financial management reform were significant in helping the Government of Iraq develop a coherent programme of economic reform, in line with IMF and World Bank recommendations.

What DfID has delivered

    —  Helped the Iraqi Government negotiate an Emergency Post-Conflict Agreement with the IMF, paving the way for the Paris Club debt reduction deal. In December 2005 Iraq secured a Stand-By Arrangement with the IMF, to provide an IMF-supported economic reform programme over the following 18 months.

    —  Trained more than 3,000 Iraqis in the South in business and enterprise skills.

    —  Helped set up the Basra Business Journal, and the Basra Business Information Centre which has 16 staff. This Centre:

    —  Has helped nearly 10,000 individuals to gain business and enterprise development skills.

    —  Is providing assistance to 18 business start-ups.

    —  Trained 60 staff of the Basra Agricultural directorate and 20 Agricultural Enterprises staff.

To be delivered over the next 12 months

    —  DfID's support to economic reform continues: we have committed £13 million (October 2005 to October 2007) to support the Ministry of Finance to lead and manage a programme of macro-economic and budget reform in Iraq.

    —  Under this programme our two consultants in Baghdad will provide advice to the government to support increased economic growth, greater political stability and poverty reduction.

    —  DfID and consultants are already engaging with the new Minister of Finance and the new Deputy Prime Minister (Economy) despite a deteriorating security situation.


  Failure to establish rule of law in Iraq will undermine UK progress in all other areas. HMG efforts to stand up Iraqi Security Forces will be critical, but are not sufficient on their own. We need to address failings within the Ministry of Interior (MoI) as well as more widely across the Rule of Law sector.

What DfID has delivered

    —  We are funding an Iraqi lawyer to coordinate the Rule of Law Sector Working Group in Baghdad. Should bring coherence efforts across the sector (among ministries and donors) and help other donors to get involved.

    —  Justice Sector Support programme—trained 216 Iraqi judges, lawyers and prosecutors in human rights, international humanitarian law, and independence of the judiciaryc.

    —  MOI project is beginning to address administrative weakness within the ministry, eg through:

    —  helping develop MOI strategic plan;

    —  supporting development of laws on police discipline;

    —  providing IT training for ministry staff; and

    —  creating legal library.

  Our biggest challenge is security. This hampers work in the ministry and recruitment of qualified people. Currently can only visit MOI by helicopter—so contact with Iraqis relies on regular flights.

To be delivered over next 12 months

    —  Approved phase 2 of the MOI Project (£5.45 million through GCPP), to:

    —  Help introduce administrative controls and accountability (reducing scope for abuses and corruption).

    —  Clarify legal and constitutional framework.


  Iraqis now have a democratically-elected government for the first time. With no history of democratic elections, many ordinary Iraqis—especially women and other marginalised groups such as Marsh Arabs and refugees—were unsure about how to vote and participate in politics. DfID's support aims to help more people from marginalised groups to take a full part in Iraq's political process by voting in national and local elections, and taking part in the debates over constitutional reform.

  The existence of a strong independent media and vocal civil society is crucial to allow the Iraqi people to hold their elected officials to account, both nationally and locally. After decades of brutality and repression, Iraq's fledgling civil society and media are flourishing, with support from DfID and the international community. More than 2,500 NGOs are registered with the Iraqi Government and over 100 independent newspapers are in circulation.

What DfID has delivered

    —  Political Participation Fund has provided 82 grants to civil society organisations. Successes include:

    —  Provided voter education to over 500,000 Iraqis, especially in Sunni areas, where second election saw voter turn out increase by 18%.

    —  Distributed 200,000 copies of the constitution, and discussed in local meetings to encourage greater turn out at the referendum.

    —  Held seminars on electoral law, reaching 20,000 students and 200,000 minority community members.

    —  Trained journalists, editors and media managers on humanitarian and independent reporting.

    —  "Al Mirbad" independent TV and radio stations on air since summer 2005 through DfID support. Run by Iraqis for Iraqis, these stations broadcast a range of programmes, including educational programmes on the political process and phone-in discussions.

    —  Al Mirbad is becoming recognised as a responsible and impartial broadcaster. After the mosque bombings in Samarra, Al-Mirbad invited Sunni and Shia sheikhs as well as the Patriarch of the Basra orthodox Church to the studio for a roundtable. Believed to be the only Southern broadcaster to include Sunni commentary in its coverage of the bombings.

    —  £5 million Civil Society Fund has supported partnerships between nine international NGOs and hundreds of Iraqi civil society groups. Our funds have helped train Iraqi civil society leaders in providing services to the people and influencing policy-making. Civil society organisations receiving support include:

    —  Trade unions.

    —  Women's groups.

    —  Humanitarian agencies.

To be delivered over next 12 months

    —  The Political Participation Fund is being extended to March 2007 at a cost of approximately £2.9 million, bringing our total commitment to £7.5 million. During 2006-07 the Fund will help to support the constitutional review process and the provincial elections in 2006.

    —  DfID's funding for Al-Mirbad is being extended till 2008, at a cost of just under £800,000, bringing our total commitment to £7.5 million. This support will enable Al-Mirbad to continue doing an excellent job of providing independent broadcasting for the South of Iraq, while the management team seeks additional sources of long-term funding, including commercial revenue.

    —  The Civil Society Fund will continue to support development of grass-roots Iraqi organisations until the project closes in November 2006.


  After the 2003 conflict, DfID provided £85 million humanitarian assistance for Iraq, in response to the UN Emergency Appeals launched in March and June 2003. Our objectives were to help avert major humanitarian crisis, and to assist in the restoration of essential services. Our contributions assisted:

    —  UNDP to repair collapsed 132 and 400kv electrical transmission lines and supply diesel generators;

    —  UNDP to provide rapid employment and earning opportunities for poor neighbourhoods in Baghdad, Basra and Mosul;

    —  UNDP to undertake necessary dredging, salvage and removal of shipwrecks in Iraqi waterways;

    —  UNICEF to provide essential nutritional supplies to reactivate Primary Health Centres and Child Community Care Units; and

    —  UNICEF to provide emergency water tankering and support for water and environmental sanitation.

  DfID has also:

    —  Contributed £32 million to the International Red Cross and Red Crescent (IRRC) movement for their Humanitarian Appeals from 2003 to 2006. This has supported emergency rehabilitation and repair work at vital health, water and sanitation facilities serving millions of people throughout the country.

    —  Provided £7.2 million to NGOs for their post conflict humanitarian work in Iraq, in sectors including: health, nutrition, water and sanitation, food, agriculture, security, de-mining action, media, humanitarian coordination and information, displaced people, power, fuel, education, and human rights.

6 July 2006

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