UN alarmed by contract blocking of Iraq oil-for-food programme

AFP, Wednesday 9 January 2002, 3:34 AM

The United Nations rang alarm bells at the number of contracts blocked by the Security Council committee overseeing its Iraq oil-for-food programme, which now total almost five billion dollars.

In a letter to the committee, programme director Benon Sevan expressed his grave concern at the unprecedented surge in the volume of holds placed on contracts as a result of sanctions imposed on Iraq in 1990.

The total value of holds—many of them demanded by the United States and Britain to prevent Iraq purchasing civilian goods with a possible military use—has increased by one billion dollars in 10 weeks.

The UN spokesman, Fred Eckhard, said Sevan would start a visit to Baghdad on Monday to review the implementation of the programme with the government, the UN humanitarian coordinator for Iraq, Tun Myat, and UN agency staff.

The oil-for-food programme was established in December 1996 to soften the impact of sanctions by allowing Iraq to export crude oil under UN supervision and to use part of the revenue to import food, medicine and other necessities.

The Security Council began to streamline its vetting procedures in March 2000, when the total value of blocked contracts stood at about 1.7 billion dollars.

In his letter, Sevan said a total of 1,854 contracts were now on hold, worth a total 4.956 billion dollars. They included orders for 4.28 billion dollars worth of humanitarian supplies and for 676 million dollars worth of oil industry equipment.

Of the total, 206 contracts, worth a total of 353 million dollars, had been blocked because the suppliers had failed to provide the sanctions committee with necessary technical information, he said.

A statistical breakdown released by Sevan's office showed that the worst-hit sector was electricity, with about 1.16 billion dollars worth of supplies on hold, followed by water and sanitation, with 577 million dollars worth.

Food imports was the only sector where no contracts had been blocked.

Almost all the holds applied to areas of southern and central Iraq under the control of President Saddam Hussein's government. Only two were for imports to the mainly ethnic Kurdish northern region where goods are distributed by UN agencies.