MCNS - GOI FOCUS ON ELECTRICITY

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 001661

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E.O. 12958: DECL: 05/17/2016
TAGS: ECON EFIN ENRG IR IZ MOPS NATO PGOV PINS
SUBJECT: MCNS - GOI FOCUS ON ELECTRICITY

Classified By: AMBASSADOR ZALMAY KHALILZAD FOR REASONS
1.4 (A),(B),(D)


1. (C//REL GBR AUS) SUMMARY: The Ministerial Committee for
National Security (MCNS),which for the first time included
PM-designate Nuri Maliki, convened May 8 to address the
significant electricity shortage in Iraq. PM Ja'afari called
the meeting because, he said, electricity is among Maliki's
top priorities. Laying out the immediate issue, DPM Chalabi
said that Iraq will miss its 6000 megawatt summer target if
the Bayji power plant does not begin to generate electricity
and transmit it to Baghdad. The Iraqis argued that security
at Bayji and interdiction along the power lines to Baghdad
are the problems. The issue posed to MNF-I was whether the
Iraqi Army (IA) could secure the Bayji power plant compound,
inside and around its perimeter, as well as do more along the
power line corridor. MNF-I CG GEN Casey responded that it is
a question of priorities and resources but that MNF-I is
prepared to work with the MOD, if so directed, to produce a
plan establishing the security requirements and costs that
would permit achieving the 6000 MW target. Casey said that
the GOI should recognize that focusing on this priority could
draw resources away from other priorities. Casey and PolMil
Couns stressed that multiple elements contribute to the
shortfall in electricity and that all of these elements have
to be addressed immediately. In a follow-up meeting on May
9, MNF-I committed to presenting a plan to Maliki within 96
hours that would lay out the security and non-security
requirements to achieve the electricity goals. END SUMMARY.


2. (C//REL GBR AUS) The MCNS convened on May 8 on a topic,
not previously-announced, electricity generation. Present
were PM Ja'afari, PM-Designate Maliki (first attendance at an
MCNS),DPM Chalabi, Minister of Interior Jabr, Minister of
Defense Dulime, NSA Rubaie, PM-Designate's Energy Advisor
Kareem Wahid, MNF-I CG Casey, Pol-Mil Counselor Litt, and UK
Charge Gibson. Ja'afari said that the MCNS was convened at
Maliki's request as he is concerned about Iraq's grave
electricity shortage.


3. (C//REL GBR AUS) Maliki stated that Iraq's severe
electricity shortage is one of the top challenges facing the
Iraqi Government. Chalabi led the discussion, asserting that
Baghdad is getting only two to four hours of power a day;
national electricity generation is supplying an average of
well below 4000 MW, with demand over 7000 MW. He emphasized
that Iraq will certainly miss its target of 6000 MW by June 1
if it cannot get the Bayji power plant up and running, with
900 MW of generated electricity flowing into Baghdad (along
with Kirkuk-generated power and the Daura and Taji gas-fed
plants). Bayji has been idle for a long while and is just
now beginning to limp along, producing only a trickle of
electricity. Chalabi explained that murder, threats and
intimidation of power plant workers effectively have stopped
nearly all Bayji operations. Chalabi added that, once the
plant generates electricity again (and one or both of the 400
kV lines to Baghdad are back in service),then interdictions
of those powerlines to Baghdad would have to be prevented.


4. (C//REL GBR AUS) Chalabi then specifically asked whether
4th IA Division elements, responsible for that sector, could
secure the Bayji compound inside and around its perimeter, as
well as do more to secure the power line corridor. Casey
responded that it could but that it is a question of
priorities. MNF-I is ready to work with MOD to readjust
resources if this is the immediate and overriding priority.
There would, however, be costs and risks associated with any
such changes. At the same time, Casey and Litt both stressed
that multiple elements contribute to the lack of electricity
and the shortfall below 6000 MW, all of which have to be
addressed immediately. Corruption, criminality, unscheduled
maintenance from the use of improper fuels, an overall
shortage of fuels, inept management and abysmal Iraqi
Ministry of Electricity and Ministry of Oil worker attitude
and productivity are all contributing causes to Iraq's
electricity shortfall. Solving only the security issue would
not achieve the objective.


5. (C//REL GBR AUS) The group discussed the fact that Iraq
already has large numbers of security personnel dedicated
to securing Iraq's energy infrastructure - the Strategic
Infrastructure Battalions (SIBs) under MOD command and the
Facilities Protection Services (FPS) units under the control
of various ministries. Chalabi complained that these forces
have failed, often purposefully, in securing Iraq's energy
infrastructure. As such, Chalabi argued, they must be
replaced by the IA.


6. (C//REL GBR AUS) Casey concurred with the observations

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about the FPS and stated that MNF-I has recognized and has
been dealing with the problems of the SIBs for the last
several months. Although there is more to be done, SIB
performance in certain areas - notably the Bayji-Kirkuk
corridor - has improved substantially. Moreover, deploying
IA units alone would not necessarily improve the electricity
situation. The IA cannot stop the internal corruption and
criminal activity that draw off a significant portion of
Iraq's electricity. Likewise, much of Iraq's energy
infrastructure production capacity is antiquated and in
severe disrepair after decades of Saddam's neglect. Many of
today's electricity shortages are due to scheduled and
unscheduled maintenance on power generation facilities.
Casey added that infrastructure attacks since the beginning
of 2006 have averaged two a week, significantly down from
last's year average of eight a week. As such, sabotage is a
relatively minor problem compared to the overall challenges
faced in producing Iraqi electricity.


7. (C//REL GBR AUS) On related energy issues, Chalabi
reported that oil exports are becoming a good news story.
For April, 1.621 million barrels of oil were exported, a
significant rise from previous months, he noted. Considering
current oil market prices, the GOI took in USD 2.97 billion
in revenue for April. Likewise, oil product imports are
down, thereby easing the balance of payments. A potential
problem that is brewing, Chalabi pointed out, is the excess
accumulation of heavy fuel oil at the Bayji refinery, which
(due to shutdown of the thermal generators, failure to secure
other uses, and lack of storage capacity) is being pumped
into underground caves. (Note: This procedure is dangerous
as fuel oil could seep into the water table and pollute the
Tigris river. Therefore, a new solution for disposition of
heavy fuel oil must be found by the GOI. End Note.)


8. (C//REL GBR AUS) The following day, Maliki chaired a
session of the same group, minus PM Ja'afari, to review some
of the potential solutions to the electricity issue discussed
the night before. Much of the same ground was covered. In
response to Maliki's query as to whether we should dispose of
the SIBs altogether and start over, GEN Casey advised against
that course of action. Noting that the MCNS faced the same
choice six months prior, the decision at that time was to
stay with the SIBs and make every effort to improve their
performance. Among the steps taken were to re-vet and clean
out units found to be involved in criminal activities
(including sabotage),to strengthen command and control
relationships between the SIBs and their Iraq Army
commanders, and to establish closer mentoring and partnership
between IA battalions and SIBs. As a result, SIB performance
has improved, and we should think very carefully about doing
away with them at this juncture. Casey committed to
developing a plan in coordination with MOD within 96 hours
that would present solutions to the security aspects of
meeting the summer goals. At the same time, Mission will
present non-security related measures that must be urgently
addressed, to which the GOI will have to devote considerable
attention and effort.
KHALILZAD