Cost of Taking Fuel to Iraq Is Questioned in New Audit

Cost of Taking Fuel to Iraq Is Questioned in New Audit

A Halliburton subsidiary charged the Iraqi government as much as $25,000 per month for each of as many as 1,800 fuel trucks that were to deliver gasoline to Iraq after the 2003 invasion, but the trucks often spent days or weeks sitting idle on the border, says a report released yesterday by an auditing agency sponsored by the United Nations.

The agency said in a statement that the auditing firm it hired had found that some of the contract costs that had been questioned earlier seemed to be justified. But the agency said the findings raised new questions about hundreds of millions of dollars billed by the company under a $2.4 billion contract that the Army awarded on the eve of the conflict to KBR, the Halliburton subsidiary formerly known as Kellogg Brown & Root.

The new audit gives the first detailed picture of how the company incurred many of those costs.

The audit said the Kuwaiti government had set the price of its gasoline at $1.13 a gallon. But with the delivery charges, the effective cost of the gas was calculated to be much higher, about $8 a gallon, according to a participant in a meeting in Paris last week at which the audits were presented to the auditing agency and the Iraqi government.

Questions have been raised about the contract since 2003, when it first became public that the contract had been awarded without competitive bidding.

Pentagon auditors challenged more than $200 million of KBR’s charges under the contract as potentially excessive or unjustified, and the agency designated by the United Nations to oversee Iraq’s vast oil revenues later recommended that the United States might have to repay some or all of that money to Iraq.

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