updated 12/22/2004 3:08:39 PM ET 2004-12-22T20:08:39

A U.S.-based construction company has pulled out of its contract to rebuild Iraq’s transportation systems, deciding it was too dangerous to stay, a spokesman for the U.S.-led reconstruction effort said Wednesday.

Contrack International Inc. of Arlington, Va., led a coalition of firms working on a $325 million contract to rebuild Iraq’s roads, bridges and railways. Contrack withdrew from that contract last month after a surge in attacks on reconstruction efforts, said Lt. Col. Eric Schnaible of the Pentagon’s Project and Contract Office in Baghdad.

“It’s hard to do construction in a place where people are shooting at you or intimidating your work force,” Schnaible said in a telephone interview. “It’s a challenge across the country.”

The PCO has taken over management of about 18 subcontractors working on transportation projects, Schnaible said. He said Contrack’s pullout was “a mutually agreed-to separation” and does not signal a larger movement by U.S.-based companies to abandon Iraq.

“Some parts of the country are a whole lot more permissive than others,” Schnaible said. “Where we can get the work done, good things are happening.”

U.S. firms and their workers have been targets ever since they entered Iraq last year. Tuesday’s deadly attack on an Army dining hall near Mosul underscored the danger: Four of those killed were Americans working for the largest contractor in Iraq, Halliburton.

Workers for Iraq contractors have been killed by mortars, car bombs and gunfire. Some have been kidnapped and beheaded.

Contrack President Karim Camel-Toueg did not immediately return telephone messages left at the company’s offices Wednesday.

The company is a subsidiary of Orascom Construction Industries, an Egypt-based conglomerate primarily engaged in the manufacture of cement and construction.

Security concerns have been a major reason for the slow pace of reconstruction which has frustrated Iraqi and U.S. officials alike. Of the $18.4 billion in Iraqi reconstruction money approved by Congress more than a year ago, less than $2 billion has been spent, PCO head Charles Hess said last month.

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