(Xinhua)
Updated: 2008-04-29 09:05

WASHINGTON -- Hundreds of reconstruction contracts in Iraq have been terminated for the US government convenience or due to the contractor's default, said a US audit report released on Monday.

The report by the Special Inspector General for Iraqi Reconstruction (SIGIR) said approximately US$42.23 billion has been appropriated for Iraq reconstruction activites since 2003, with 35.3 billion out of it obligated as of January 2008.

"Rebuilding Iraq is a US national security and foreign policy priority, and constitutes the largest US assistance program since the Second World War," it said.

However, among 47,321 projects accounted, nearly 855 reconstruction contracts or task orders under individual contracts have been terminated as of March 20, according to the report.

It said 743 contracts were terminated for the US government convenience, meaning "it has the right to cancel work under a contract whenever it determines that cancellation is in its best interest."

For instance, the report said a contract for construction of power lines was halted after the Iraqi contractor was killed.

Another 112 contracts were terminated for default, meaning that the exercise of the government's right to completely or partially terminate a contract because of the contractor's actual or anticipated failure to perform its contractual obligations.

In a separate report also released on Monday, the SIGIR noted that the lack of management controls and working agreement with the Iraqi government has placed US investment in the Iraqi reconstruction at risk.

The SIGIR is a temporary federal agency created by Congress to serve as a watchdog for fraud, waste and abuse of funds intended for Iraq reconstruction programs, its website said.