Posts Tagged ‘Construction costs’

America builds a new embassy in Baghdad

October 27th, 2009

The most expensive embassy in the world

In these times of hi-tech surveillance equipment, hi-tech spying games and hi-tech international politics, just about the most sensitive thing any government can do is to build a new embassy in a foreign country.

The shift in Iraq

The US presence in Iraq is slowly moving from peacekeeping activities to reconstruction and one of the focal points is the construction of a brand new embassy – not just another embassy, but the largest and most expensive embassy in the world. The grounds along the Tigris River cover 104 acres, about the size of Vatican City. The construction cost is over $700 million and took 34 months, meaning that the contractors earned something like 20 million dollars per month.

The result

According to a report issued last week by the State Department’s inspector general, the construction “is significantly deficient in multiple areas” and may not meet safety codes. It called on the State Department to seek $132 million in damages from the main construction company, First Kuwaiti General Trading and Contracting, principal contractors. Walls and walkways are cracking, sewage gas flows back into residences, wiring is substandard, fire protection systems are faulty and other safety provisions do not meet contract specifications.

To sue or not to sue?

The US Bureau for Overseas Building Operations is considering whether to seek reimbursement, although they stated that “the deficiencies are not adversely affecting embassy operations.” The scale of the embassy is massive while its aesthetic appeal is minimal. The campus comprises 27 buildings in boxy, tan concrete, including apartments for 1,100 people. The heavily guarded site has a 15 foot thick perimeter wall around it and was built by a Kuwaiti contractor who employed only foreign staff.

The faults

The report on the completed building lists problems with water, wiring, design, automation, sewage, walls, ceilings, power generators, emergency safe areas and structural reinforcement to protect the embassy from earthquakes. It says that First Kuwaiti charged for $33 million worth of design services that were either incomplete or undocumented. The report says construction was also mismanaged by the government overseers. In order to speed construction, the Bureau of Overseas Building Operations created a standalone agency to act as contractor, outside the normal review process. This agency failed to enforce contracts or to maintain quality control, the report says. The

Iraqis are disappointed

Basically the Iraqis are saying that if the US couldn’t do a proper job on the embassy project, how will they fare on the entire Iraq project?

Budget overrun

The original 2005 budget was supposed $592 million, but as in every construction project there were “extras”:

• $4.6 million in restitution from First Kuwaiti to repair safe areas for staff members, which were not built to specification;
• $14 million to install seismic bracing against earthquakes;
• $11 million to compensate for an inefficient power plant;
• $4.6 million to replace fire protection systems; and
• $1.5 million to repair faulty plumbing in 200 locations where sewage gas could escape.

Tags: Baghdad, Building contractors, Construction costs, Embassy, Extras, Quality control
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