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Program Review Board (PRB) Minutes – April 28, 2004

* George Wolfe Chairman/Director Office of Management and Budget
* Hazim Saed Iraq Ministry of Finance
* Dr. Faik Ali Abdul-Rasool Iraq Ministry of Planning and Development Cooperation
* Leigh McJames Deputy Senior Advisor for the Office of Security Affairs
* Teddy Bryan USAID
* Col Frank Boynton Director, Office of Operations & Infrastructure
* Efrain Cohen Governance
* COL William Ford Coalition Joint Task Force – 7, Comptroller
* Yusaf Samiullah Representative of the United Kingdom Government
* Absent Representative of the Australian Government
* Chris Soares Economic and Development Policy
* Neil Hawkins Council for International Cooperation
COL Eric Engelbrektsson Program Coordinator
Jesse Pruett Program Review Board - Regional Programs Manager
COL Rafael Lara CPA – General Counsel
1Lt Demetrius Prado CPA Comptroller
BG Steve Seay CPA – HCA
COL Robert Speer CPA – Program Management Office
Lt Col Jim Reitzel Coalition Joint Task Force – 7, Comptroller
John Moore CPA – Ministry of Finance
Sarah Horrigan CPA – Ministry of Finance
LTC Alan Farrier CPA – Ministry of Finance
Taif Sami Iraqi Ministry of Finance
Jerry Martin CPA – Ministry of Oil
Norm Szydlowski CPA – Ministry of Oil
Erik Nelson CPA – Ministry of Oil
Joel Berwick CPA – Ministry of Oil
Ahmed Alshamma Iraq Ministry of Oil
Aziz Al-Ghanimi Iraq Ministry of Oil
Ahmed Bacifrani Iraq Ministry of Oil
Stephen Myrow CPA Ministry of Transportation
Peter Babb CPA Ministry of Transportation
Regan McDonald CPA Ministry of Water Resources
Chris Prinslow USACE-RIE
Carla Clemons CPA Ministry of Electricity
MAJ Carlos Henderson USACE-Centcom
Dennis Thomas USACE-RIO
Mike Powers PMO Finance
Col Mike Falino PMO Programs
Lt Col Kevin King CPA Chief Operating Office
LTC Mark Ellington Office of Security Cooperation-J8
*Voting Members


The PRB approved the minutes from the 28 April 04 meeting.


#681—Improve Crude Oil Flow to Daura--$34,500,000. Ministry of Oil(MoO)/COL Emmett DuBose. MoO proposes to make improvements to pipelines and power station #3 (PS3) to increase production at the Daura oil refinery. The largest investment would be the rehabilitation of PS3 which would nearly double the flow rate into the refinery. Other measures would increase benzene production by over 700,000 liters per day cleaning the lines and reducing sabotage. It is critical to the Iraqi economy to increase crude flow to Daura Refinery as well as reduce the interruptions due to sabotage of the lines.
The proposal was tabled to allow until MoO coordinates with the Iraqi Ministry of Finance and Ministry of Planning.

#682—IAMB Crude Oil Metering--$5,000,000. Ministry of Oil (MoO)/COL Emmett DuBose. MoO proposes to provide metering at appropriate points in the Iraqi oil infrastructure to assess the input and output at key nodes in the system, assess performance of the infrastructure, and provide positive controls over the distribution and sales of crude and refined products. Metering for crude oil extraction and sales is presently nonexistent in Iraq. A critical step in restoring the Iraqi oil infrastructure is to provide a system to control accountability of crude oil and its products. This situation was highlighted at a meeting of the International Advisory and Monitoring Board (IAMB) in Kuwait City on March 17-18, 2004. The IAMB monitors the financial reporting and internal control systems established by the CPA and advises on the adequacy of such systems. Their specific recommendation was "the expeditious installation of metering equipment in accordance with standard oil industry practices."
The proposal was tabled to allow until MoO coordinates with the Iraqi Ministry of Finance.

#683—Umm Qasr Port Renovation--$15,280,000. Ministry of Trade (MoT)/Peter Babb. MoT proposes to repair and upgrade grain offloading facilities at Iraq's port of Umm Qasr. The renovation of the facilities is necessary to ensure the sustainable flow of the basic staple food needs of the Iraqi people. To meet food ration needs and maintain adequate buffer stocks, Iraq requires 250,000mt (metric tons) of imported wheat be discharged every month at the port of Umm Qasr. The current operational performance of the Umm Qasr grain facility is far below its potential capacity, allowing the importation of only 80,000 to 120,000mt per month. The dearth of domestic receiving capacity has forced Iraq to rely upon temporary, alternative facilities neighboring foreign ports. Use of these temporary facilities is both expensive and inefficient. Iraq needs to establish domestic capacity to meet its grain importation requirements. Investment in Umm Qasr is necessary to assure adequate food supply for the Iraqi people.
The proposal was tabled to allow until MoT coordinates with the Iraqi Ministry of Finance and Ministry of Planning.


#685—Emerging Security Requirements--$500,000,000. CJTF-7/Lt Col James Reitzel. Recent developments throughout Iraq indicated the urgent need for increased security in as Iraqi sovereignty approaches. The requirement is for security related reconstruction and military needs arising, in large part, to the recent upswing in violence. To meet these needs, this proposal requests an additional $500 million from the DFI. We anticipate that some of these funds will be used to address security needs that are only now being identified, as the security situation is still evolving and the needs are being assessed on an ongoing basis. While specific project lines items are not defined, there is a well-defined process for executing these funds. The Commanders’ Emergency Response Program (CERP), Rapid Regional Response Program (R3P), and other established CPA contracting mechanisms will be leveraged to expedite project implementation under this program.

The representative from CPA Governance asked if there was an estimate of the split between CERP and traditional security requirements. CJFT-7 stated that the estimate would not be available until they had more data from the key cities team visits.

The UK representative suggested four conditions for approval for discussion:
1. Put in place a tracking system to gauge the benefit of specific CERP projects. CJTF-7 and PMO agreed to begin tracking the benefit of future CERP efforts and, subject to reasonable effort and time constraints, look at the benefits of past efforts.
2. When detailed projects are forthcoming, estimate the O&M impact. CPA is looking at the O&M impact of proposed projects and will consult with the Iraqi MoF and MoP to evaluate the impact on future budgets.
3. Obtain a formal project “sign-off” from the Iraqi MoF/MoP/MoPW and local officials.
4. Set a notional breakout (%) between traditional security and CERP projects. The PMO stated that there was not enough information at the time to estimate what the breakout should be. The Chair added that a notional breakout would limit the Administrator’s ability to react as the necessitated by developments.
The UK representative asked for a description of the contracting process for this proposal. CJTF-7 stated that projects that fall within the parameters of CERP and R3P would follow the established guidelines for those programs. Larger projects would be executed through established CPA procedures.

The Iraqi MoP stated support for the proposal. MoP said that Iraqi ministries should be consulted on projects under this proposal. MoP also asked that there be an accounting of the beneficiaries of this proposal. This will be covered in the tracking concept agreed to by CJTF-7 and PMO.

The Iraqi MoF also stated support for the proposal.

The CPA/MoF Director of Regional Programs stated that CERP and R3P have often been funded without specific project details.

The Council for International Cooperation (CiC) representative asked whether the projects would be open to international tender. CJTF-7 stated that the CERP and R3P programs, as a matter of policy, will deal largely with local Iraqi contractors. PMO stated that it will, for the most part, use existing tenders which have been competed internationally, and that new tenders would be open tenders. CIC asked whether there was an effort to coordinate projects with the donor country projects list to avoid overlap. PMO stated that it was looking at the coordinating these projects, not only with donor country projects, but also with other projects funded with US supplemental and DFI funds. CIC suggested that all large projects should be reviewed by the Iraqi Strategic Review Board, as specified in CPA Regulation #7. The Chair stated that CPA guidance will naturally be followed.

The Chair summarized the discussion. The representative of the Iraqi Ministry of Planning offered a motion to amend the motion to adopt the proposal; the representative of CJTF-7 seconded the motion:

Provided, that in implementing this plan, the Administrator is encouraged to draw upon the expertise of the Ministries in the applicable sectors, to consult with the Ministries of Finance and Planning, and to consult with CIC to help ensure appropriate coordination of donor country project lists.

The representative of CPA Operations and Infrastructure made a motion to approve the proposal as amended; the representative of CPA Governance seconded. The board unanimously approved the proposal.
APPROVED AS AMENDED: DFI -- $500,000,000


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