WORKING PAPERS

1. WORKING PAPERSIraq Status

This briefing is classified UNCLASSIFIED Derived from: Multiple Sources UNCLASSIFIED UNCLASSIFIED

3. Governance - Developments

N/P UNCLASSIFIED UNCLASSIFIED The United Nations is assisting the Iraqi Interim Government (IIG) in preparation for national elections by Jan 05 The Chief Electoral Officer and Commissioners of the Independent Electoral Commission of Iraq (IEC) recently completed a two week intensive training program in Mexico City Program covered standards and principles of credible elections, dispute resolution, political party and voter registration, voter education campaigns, and procedures for polling and counting results USAID awarded a $50 million cooperative agreement to three US non-governmental organizations to support civil society involvement in the national elections, includes: Educating voters on broad issues of democracy, participation, and elections Building capacity within local civil society organizations to monitor the electoral process and field domestic election observers Prime Minister Allawi is visiting leaders of several Arab countries this week, possible areas of discussions include: potential Iraqi membership in the Gulf Cooperation Council (GCC) and security assistance Develop Framework and Capacity for Elections The United Nations continues to assist the Iraqi Interim Government in preparation for national elections by January 2005. The seven Commissioners and a Chief Electoral Officer - who had been selected in an open, UN-led process - received training on a range of issues, including the standards and principles of credible elections, approaches for dispute resolution and voter registration. Other areas covered were the registration of political parties, voter education campaigns, and procedures for polling, counting and tabulating results. Under a recently awarded grant to a US-based non-governmental organization (NGO), USAID has begun providing technical assistance to support the work of the new Government of Iraq (GOI).� This past week, advisors from the NGO attended the first meeting of the Supreme Commission which is organizing the National Conference, scheduled to be held in July.� The National Conference will be an assembly of a thousand people convened by the GOI who will select a National Council of 100 members to oversee the government and the cabinet council of ministers.� NGO advisors are providing the Commission with the results of a public opinion poll to ensure that the thoughts of the public are incorporated into Conference development. �In addition, information materials and advice are being provided for the development of rules for committee meetings. The Commission�s six key committees will each include at least one Iraqi technical advisor, selected from a pool of candidates that included suggestions made by NGO advisors. Develop Framework and Capacity for Elections The United Nations continues to assist the Iraqi Interim Government in preparation for national elections by January 2005. The seven Commissioners and a Chief Electoral Officer - who had been selected in an open, UN-led process - received training on a range of issues, including the standards and principles of credible elections, approaches for dispute resolution and voter registration. Other areas covered were the registration of political parties, voter education campaigns, and procedures for polling, counting and tabulating results. Under a recently awarded grant to a US-based non-governmental organization (NGO), USAID has begun providing technical assistance to support the work of the new Government of Iraq (GOI).� This past week, advisors from the NGO attended the first meeting of the Supreme Commission which is organizing the National Conference, scheduled to be held in July.� The National Conference will be an assembly of a thousand people convened by the GOI who will select a National Council of 100 members to oversee the government and the cabinet council of ministers.� NGO advisors are providing the Commission with the results of a public opinion poll to ensure that the thoughts of the public are incorporated into Conference development. �In addition, information materials and advice are being provided for the development of rules for committee meetings. The Commission�s six key committees will each include at least one Iraqi technical advisor, selected from a pool of candidates that included suggestions made by NGO advisors.

4. Governance - Developments (Cont.)

N/P UNCLASSIFIED UNCLASSIFIED United Nations Secretary-General Kofi Annan named Pakistan's current Ambassador to the United States, Ashraf Jehangir Qazi, as his Special Representative for Iraq USAID has been continuing its Democracy Dialogue Activities (DDA) and more than 14,000 program activities have been held in communities across Iraq Has stimulated civic participation and increased Iraqi understanding of democratic principles and the political process Develop Framework and Capacity for Elections The United Nations continues to assist the Iraqi Interim Government in preparation for national elections by January 2005. The seven Commissioners and a Chief Electoral Officer - who had been selected in an open, UN-led process - received training on a range of issues, including the standards and principles of credible elections, approaches for dispute resolution and voter registration. Other areas covered were the registration of political parties, voter education campaigns, and procedures for polling, counting and tabulating results Under a recently awarded grant to a US-based non-governmental organization (NGO), USAID has begun providing technical assistance to support the work of the new Government of Iraq (GOI).� This past week, advisors from the NGO attended the first meeting of the Supreme Commission which is organizing the National Conference, scheduled to be held in July The National Conference will be an assembly of a thousand people convened by the GOI who will select a National Council of 100 members to oversee the government and the cabinet council of ministers.� NGO advisors are providing the Commission with the results of a public opinion poll to ensure that the thoughts of the public are incorporated into Conference development. �In addition, information materials and advice are being provided for the development of rules for committee meetings. The Commission�s six key committees will each include at least one Iraqi technical advisor, selected from a pool of candidates that included suggestions made by NGO advisors Develop Framework and Capacity for Elections The United Nations continues to assist the Iraqi Interim Government in preparation for national elections by January 2005. The seven Commissioners and a Chief Electoral Officer - who had been selected in an open, UN-led process - received training on a range of issues, including the standards and principles of credible elections, approaches for dispute resolution and voter registration. Other areas covered were the registration of political parties, voter education campaigns, and procedures for polling, counting and tabulating results Under a recently awarded grant to a US-based non-governmental organization (NGO), USAID has begun providing technical assistance to support the work of the new Government of Iraq (GOI).� This past week, advisors from the NGO attended the first meeting of the Supreme Commission which is organizing the National Conference, scheduled to be held in July The National Conference will be an assembly of a thousand people convened by the GOI who will select a National Council of 100 members to oversee the government and the cabinet council of ministers.� NGO advisors are providing the Commission with the results of a public opinion poll to ensure that the thoughts of the public are incorporated into Conference development. �In addition, information materials and advice are being provided for the development of rules for committee meetings. The Commission�s six key committees will each include at least one Iraqi technical advisor, selected from a pool of candidates that included suggestions made by NGO advisors

5. Governance - National Transition

N/P UNCLASSIFIED 2004 UNCLASSIFIED Election Commission established Elections for the National Assembly complete: NLT 31 Jan 05 Iraqi Interim Government (IIG) Announced and Governing Council dissolved National Assembly completes draft of permanent constitution Referendum for permanent constitution Elections for government completed Elected government assumes office 2005 Phase I (Interim Government) Iraqi Transitional Government takes power Phase II (Elected Government) National Conference convenes and selects Interim National Council Transfer sovereignty from CPA to IIG Iraqi Census to develop election rolls

6. Essential Services - Water and Sanitation

N/P UNCLASSIFIED UNCLASSIFIED Rehabilitation of a water treatment plant in a poor area of Baghdad is complete benefiting nearly 1 million residents The�plant was operating at 55-60 percent capacity before the rehabilitation Completion of work on a number of treatment plants and systems in the second half of 04 is expected to substantially increase access to potable water: Baghdad�s Shark Dijlah plant will benefit 750,000 people Ad Diwaniyah plant will benefit more than 80,000 people An Najaf plant will benefit 560,000 people Ninawa� Governorate plants will benefit 50,000 people Fallujah plant will benefit more than 200,000 people Japan will send $3.7 million in aid to the al-Muthanna province in southern Iraq province to buy 26 water trucks, 304 water tanks for trucks and hundreds of water tanks The grants are part of the $1.5 billion Tokyo has pledged for postwar Iraqi reconstruction this year The rehabilitation of a water treatment plant in a poor area of Baghdad governorate is complete, and nearly 1 million residents are now benefiting from the provision of potable water in their area. The�plant was operating at 55-60% of its 3000 m3/day capacity before the rehabilitation, as�one of plant�s three clarifiers was no longer working. This decrease in the quality and amount of water impacted two local hospitals, five primary health centers, 120 schools, and approximately 600,000 household beneficiaries. Through this project, the plant�s clarifier tank pumps, chlorinators, alum dosing pumps, flash mixer, intake structure, and electronic control boards were repaired. The water treatment plant is now operating at full capacity To help ease a drinking water crisis in the area, a government agency in southern Iraq will begin drilling four boreholes to provide a temporary raw water source and lay the foundation for connecting the local community to the region�s main water supply later in the year. USAID�s Iraq Transition Initiative provided a grant and worked with the local government to develop this project upon the recommendation of the town council. The grant will specifically help develop local government capacity to implement community development projects and demonstrate how it can be responsive to citizen needs in the new Iraq The Japanese government said that the country will send $3.68 million in aid to a southern Iraqi province for trucks and hundreds of water tanks, the Saudi Press Agency reported. The grants, which are earmarked for the al-Muthanna province's water department, are part of the $1.5 billion Tokyo has pledged for postwar Iraqi reconstruction this year. A Japanese Foreign Ministry spokeswoman said that the al-Muthanna provincial government would use the money to buy 26 water trucks and 304 water tanks � The rehabilitation of a water treatment plant in a poor area of Baghdad governorate is complete, and nearly 1 million residents are now benefiting from the provision of potable water in their area. The�plant was operating at 55-60% of its 3000 m3/day capacity before the rehabilitation, as�one of plant�s three clarifiers was no longer working. This decrease in the quality and amount of water impacted two local hospitals, five primary health centers, 120 schools, and approximately 600,000 household beneficiaries. Through this project, the plant�s clarifier tank pumps, chlorinators, alum dosing pumps, flash mixer, intake structure, and electronic control boards were repaired. The water treatment plant is now operating at full capacity To help ease a drinking water crisis in the area, a government agency in southern Iraq will begin drilling four boreholes to provide a temporary raw water source and lay the foundation for connecting the local community to the region�s main water supply later in the year. USAID�s Iraq Transition Initiative provided a grant and worked with the local government to develop this project upon the recommendation of the town council. The grant will specifically help develop local government capacity to implement community development projects and demonstrate how it can be responsive to citizen needs in the new Iraq The Japanese government said that the country will send $3.68 million in aid to a southern Iraqi province for trucks and hundreds of water tanks, the Saudi Press Agency reported. The grants, which are earmarked for the al-Muthanna province's water department, are part of the $1.5 billion Tokyo has pledged for postwar Iraqi reconstruction this year. A Japanese Foreign Ministry spokeswoman said that the al-Muthanna provincial government would use the money to buy 26 water trucks and 304 water tanks �

7. Essential Services - Telecommunications

N/P UNCLASSIFIED UNCLASSIFIED Total number of telephone subscribers in Iraq is now over 1,318,000 (including 524,000 cell phone subscribers) - 58.3 % above pre-war levels As of 04 Jul, there were 70,000 internet subscribers in Baghdad Pre-war, there was limited service, with 3,000 Internet and 8,000 e-mail only accounts in �02 (As of 08 Jul) �Telecommunications: There are now 794,198 active landline telephone subscribers in Iraq, compared to 833,000 subscribers pre-war.� The total number of telephone subscribers, including cell phone subscribers, is 1,318,164, which is 58.2 percent greater than the number of active landline subscribers pre-war. Cell phone service was very limited pre-war The three major cell phone companies in Iraq (Asia Cell, Iraqna, and Atheer in the North, Central, and South respectively) continue to enroll new cell phone subscribers. Cell phone subscribers total 523,966 nationwide. Currently, in Mosul, Sulaymaniyah, and Kirkuk, there are 212,000 cell phone subscribers.� In Baghdad, there are 230,000 cell phone subscribers; and in Basra, Al Kut, Amarah, Samawah, and Nasiriyah there are 66,966 cell phone subscribers. Sana Tel, which operates in Sulaymaniyah, has 15,000 subscribers The penetration rate (the number of active landline telephone subscribers as a percentage of the population) is 2.93 percent vs. 3.1 percent pre-war (using an estimated population of 27,139,021 according to the Iraqi Central Statistical Organization 1997 Census, (assuming 3% annual growth)) Since May 2003, landline telephone service has been reinstated for 211,598 subscribers nationwide�Telecommunications: There are now 794,198 active landline telephone subscribers in Iraq, compared to 833,000 subscribers pre-war.� The total number of telephone subscribers, including cell phone subscribers, is 1,318,164, which is 58.2 percent greater than the number of active landline subscribers pre-war. Cell phone service was very limited pre-war The three major cell phone companies in Iraq (Asia Cell, Iraqna, and Atheer in the North, Central, and South respectively) continue to enroll new cell phone subscribers. Cell phone subscribers total 523,966 nationwide. Currently, in Mosul, Sulaymaniyah, and Kirkuk, there are 212,000 cell phone subscribers.� In Baghdad, there are 230,000 cell phone subscribers; and in Basra, Al Kut, Amarah, Samawah, and Nasiriyah there are 66,966 cell phone subscribers. Sana Tel, which operates in Sulaymaniyah, has 15,000 subscribers The penetration rate (the number of active landline telephone subscribers as a percentage of the population) is 2.93 percent vs. 3.1 percent pre-war (using an estimated population of 27,139,021 according to the Iraqi Central Statistical Organization 1997 Census, (assuming 3% annual growth)) Since May 2003, landline telephone service has been reinstated for 211,598 subscribers nationwide

8. Essential Services - Food Security

N/P UNCLASSIFIED UNCLASSIFIED Security has improved on major trucking routes and trucks have continued transporting grain from Umm Qasr port to storage facilities throughout the country Buffer food stocks are at approximately one month and building, with the goal of a three-month buffer stock by the end of summer The Ministry of Trade (MOTR) has contracts with two Iraqi firms and a Turkish firm to supply 200,000 metric tons of flour in Jul and Aug Harvest of national wheat through the end of Jul will ensure that there is an additional two months supply of wheat MOTR�s second set of food procurement tenders have been issued and bids are due shortly, which will further augment nationwide stocks for the rest of the year The food pipeline is dependent upon World Food Program (WFP) procurement until Sep 04 and MOTR procurement thereafter Jun was the last month in which Oil For Food (OFF) commodities arrived in significant quantities Trucks continue transporting grain from Umm Qasr port to storage facilities throughout the country. The current security situation has improved on major trucking routes. Buffer stocks are at approximately one month and building, with the eventual goal of a three-month buffer stock by the end of summer Ministry of Trade�s (MOTR) second set of food procurement tenders have been issued and bids are due shortly. The second set of tenders will further augment nationwide stocks for the rest of the year After training at the WFP headquarters in Rome, staff will return to set-up a new inventory tracking system that will tie all national food storage facilities to MOTR headquarters in Baghdad There are two WFP procured rice shipments that will arrive later this month, after which no more WFP rice will be arriving in Iraq and MOTR will action procurements June was the last month in which OFF commodities arrived in significant quantities. The pipeline is now dependent upon WFP procurement for July to September and MOTR procurement thereafterTrucks continue transporting grain from Umm Qasr port to storage facilities throughout the country. The current security situation has improved on major trucking routes. Buffer stocks are at approximately one month and building, with the eventual goal of a three-month buffer stock by the end of summer Ministry of Trade�s (MOTR) second set of food procurement tenders have been issued and bids are due shortly. The second set of tenders will further augment nationwide stocks for the rest of the year After training at the WFP headquarters in Rome, staff will return to set-up a new inventory tracking system that will tie all national food storage facilities to MOTR headquarters in Baghdad There are two WFP procured rice shipments that will arrive later this month, after which no more WFP rice will be arriving in Iraq and MOTR will action procurements June was the last month in which OFF commodities arrived in significant quantities. The pipeline is now dependent upon WFP procurement for July to September and MOTR procurement thereafter

9. Essential Services - Health Care

N/P UNCLASSIFIED UNCLASSIFIED Over 5 million children between the ages of six and 12 have been immunized for Measles, Mumps, and Rubella Over 3 million children under five years of age have been vaccinated since Jun 03 Shortages in critical pharmaceuticals continue due to factors including supply chain problems and corruption. As part of the response: Deliveries from the Ministry of Health�s (MoH�s) second emergency drug purchase are expected to commence very soon The MoH has appealed for international assistance The MoH Inspector General has recommended the implementation of an improved inventory system Supplemental funds are targeting construction of primary health care clinics in every governorate and rehabilitation of 16 pediatric / maternal hospitals 240 Iraqi hospitals and over 1,200 preventive health clinics are operating

10. Essential Services - Education

N/P UNCLASSIFIED UNCLASSIFIED USAID awards Iraq Basic Education  On July 15, USAID announced the award of a $56.4 million Iraq Basic Education contract to Creative Associates International to focus on providing technical assistance to the Ministry of Education (MOE) and empower its personnel to deliver quality education in Iraq. The contract will specifically focus on enabling the MOE to conduct institutional capacity building of the MOE; to create model schools in each of the 81 sub-districts; train primary and secondary school teachers; procure supplies and equipment for school children of Iraq and promote and facilitate community participation in the quality of early childhood education The contract is a continuation of USAID's commitment to develop the Iraqi education system and build on the foundation of Rehabilitation of Iraqi Schools and Stabilization of Education ProgramUSAID awards Iraq Basic Education On July 15, USAID announced the award of a $56.4 million Iraq Basic Education contract to Creative Associates International to focus on providing technical assistance to the Ministry of Education (MOE) and empower its personnel to deliver quality education in Iraq. The contract will specifically focus on enabling the MOE to conduct institutional capacity building of the MOE; to create model schools in each of the 81 sub-districts; train primary and secondary school teachers; procure supplies and equipment for school children of Iraq and promote and facilitate community participation in the quality of early childhood education The contract is a continuation of USAID's commitment to develop the Iraqi education system and build on the foundation of Rehabilitation of Iraqi Schools and Stabilization of Education Program

11. Project and Contracting Office (PCO) Developments

N/P UNCLASSIFIED UNCLASSIFIED Number of Iraqis employed on projects funded by the supplemental and and Accelerated Iraq Reconstruction Program (AIRP) is now over 31,000 Both the number of projects underway and number of Iraqis employed will jump significantly over the next few months The PCO has issued 165 task orders, out of a total of 250 (69%) These task orders cover 1,566 projects nationwide, out of a total 2,300 (68%) The AIRP continues to gain momentum nationwide to meet urgent local needs Projects cover: water and sanitation, health, education, building, roads, power and telecommunications Over 11,600 Iraqis have been directly employed on AIRP projects Approximately 2,500 Iraqis employed on Sadr City landfill & sewer projects Stimulates local economy and provides opportunities for local businesses

12. Project and Contracting Office (PCO)

UNCLASSIFIED UNCLASSIFIED N/P Data as of 13 Jul

13. Economy

N/P On 28 Jun, estimated crude oil export revenue was around $8.1 billion for 04 (latest data available) The Consumer Price Index for May in Iraq declined by 1.2 percent relative to its Apr level The New Iraqi Dinar was at 1,460 dinars per dollar on 8 Jul, and has been stable for nearly five months Iraq's Finance Ministry auctioned 150 billion dinars ($103 million) of treasury bills on 18 Jul This is the first step in re-establishing a local bond market and will allow free-market forces to set interest rates Will be used to repay debt issued by Saddam Hussein's regime Future auctions are expected to take place every few weeks A result of the capacity building efforts at the Central Bank of Iraq by Coalition advisors UNCLASSIFIED UNCLASSIFIED On July 18, the Ministry of Finance will auction 150 billion dinars of three month treasury bills as the country�s first step in the re-establishment of a domestic bond market. These bills will finance the repayment of maturing government securities, which were issued under the former regime. The bond rates will be set by market forces demonstrating the Ministry�s commitment to shifting Iraq�s economy to a market based-system The accomplishment is the result of months of capacity building efforts at the Central Bank of Iraq (CBI) by USAID and Coalition Provisional Authority advisors. In June, most of the training and technical assistance to the CBI was completed. As a result of this assistance, banking reserve requirements were amended, a monetary policy framework was developed, and the process for formulating monetary policy was finalized. Central bank staff has also begun the process of improving monetary data collection and analysis. Finally, the Central Bank has adopted new interest rates, which include the policy rate, primary credit rate, secondary credit rate, and overnight deposit rateOn July 18, the Ministry of Finance will auction 150 billion dinars of three month treasury bills as the country�s first step in the re-establishment of a domestic bond market. These bills will finance the repayment of maturing government securities, which were issued under the former regime. The bond rates will be set by market forces demonstrating the Ministry�s commitment to shifting Iraq�s economy to a market based-system The accomplishment is the result of months of capacity building efforts at the Central Bank of Iraq (CBI) by USAID and Coalition Provisional Authority advisors. In June, most of the training and technical assistance to the CBI was completed. As a result of this assistance, banking reserve requirements were amended, a monetary policy framework was developed, and the process for formulating monetary policy was finalized. Central bank staff has also begun the process of improving monetary data collection and analysis. Finally, the Central Bank has adopted new interest rates, which include the policy rate, primary credit rate, secondary credit rate, and overnight deposit rate

14. Economy (Cont.)

N/P Nearly 3,000 micro-credit loans were made to Iraqi businesses totaling over $6M Provides credit to financially viable micro and small businesses USAID is assisting the Iraqi Ministry of Labor and Social Affairs (MOLSA) to develop a vocational training program that will help the Iraqi government address Iraq�s high unemployment rate Will help improve the skills of Iraq�s workforce through vocational and technical training centers and employment centers Minister of Industry and Minerals is exploring leasing or renting State-owned factories for several years, as well as profit-sharing deals Would secure needed funding for the factories while avoiding privatization until an elected government is in place USAID recently completed training for Iraq�s Ministry of Finance staff on the new Financial Management Information System (FMIS) FMIS will be implemented at 28 Ministries and four government agencies allowing more accurate and transparent accounting and reporting UNCLASSIFIED UNCLASSIFIED Ministry Staff Trained on Financial Management Information System Training on the new Financial Management Information System (FMIS) has been completed for 17 staff members of Iraq�s Ministry of Finance. Nine staff members were trained in functional operation of the system and another eight were trained in technical maintenance.� Training provided a basis to allow the staff members to independently operate the FMIS and will be followed up with computer-based training as necessary.� The training is part of a larger initiative by USAID to support improved budget planning and implementation in the Iraqi government FMIS is an automated networked accounting and budget execution system with online access and a real-time updated centralized database for all spending organizations in Iraq. The system will be implemented at a total of 28 Ministries and four government agencies, and will allow them to more accurately record financial transactions. The new system will ensure the use of public sector resources for the benefit of Iraqi citizens and will support a sovereign democratic Iraq by promoting transparency in governmentMinistry Staff Trained on Financial Management Information System Training on the new Financial Management Information System (FMIS) has been completed for 17 staff members of Iraq�s Ministry of Finance. Nine staff members were trained in functional operation of the system and another eight were trained in technical maintenance.� Training provided a basis to allow the staff members to independently operate the FMIS and will be followed up with computer-based training as necessary.� The training is part of a larger initiative by USAID to support improved budget planning and implementation in the Iraqi government FMIS is an automated networked accounting and budget execution system with online access and a real-time updated centralized database for all spending organizations in Iraq. The system will be implemented at a total of 28 Ministries and four government agencies, and will allow them to more accurately record financial transactions. The new system will ensure the use of public sector resources for the benefit of Iraqi citizens and will support a sovereign democratic Iraq by promoting transparency in government

15. Iraqi Budgeted Spending for 04

N/P UNCLASSIFIED UNCLASSIFIED The following chart shows budgeted Iraqi spending for 04, from all revenue sources: The table above shows budgeted Iraqi government spending for 2004. Actual spending data is not available as most transactions are still cash-based and paper-intensive. The new financial management system is barely out of the testing stage in Baghdad, and has not been fully implemented in regional offices The table above shows budgeted Iraqi government spending for 2004. Actual spending data is not available as most transactions are still cash-based and paper-intensive. The new financial management system is barely out of the testing stage in Baghdad, and has not been fully implemented in regional offices

16. Electricity Overview

N/P Data as of 15 Jul UNCLASSIFIED UNCLASSIFIED Due to unforeseen problems we were unable to attain the 1 June or 30 Jun goals, but still hope to be able to reach 6000 MW/120,000 MWH in July. The top chart shows average daily power production in Mega Watt Hours (MWH). 120,000 MWH goal equates to 20 hours at 6000 MW average supplied load or 24 hours at 5000 MW average supplied load. Actual consumption this summer will likely be at least 7000-8000 MW at peak, possibly resulting in 15-18 hours of power for most Iraqis this summer when we reach 6000 MW � a vast improvement over last summer and also a vast improvement over previous years for most Iraqis outside of Baghdad. Currently supplies are not much much improved over last year when judged by hours of power, but this is at least partially due to an influx of new appliances dramatically altering demand and diluting the effect of increased generation capacity on actual results. Recent unrest and sabotage to oil and electricity infrastructure caused project delays making the 30 June target of 6000 MW unreachable. Uncertainty surrounding transition will likely lead to many, if not all, foreign contractors ceasing work for the next week or so, which could impact capacity growth by delaying projects for the next two to three weeks. Spare parts and major equipment will continue to encounter some delivery delays. Timely delivery will be reliant on the provision of convoy escorts. If instability increases again causing more workers to leave their job sites after the current transition related stand-downs, we will continue to see significant slippage in the schedules. 6000 MW could be achieved in July if all goes well, but further slippage is likely if additional unrest occurs over the next several weeks. The Spring maintenance program is winding down, but delays have stretched timelines, and units scheduled to be back on line before June 1 are still offline for maintenance. Also, it has come to our attention that many of the rehabs are superficial and have not added as much to capacity as expected. Some units are already returning from maintenance, and some units that we had planned to take off line for maintenance may be postponed to maximize capacity available as we enter the summer peak period. Units currently down for planned maintenance and rehabilitation on average over the past week resulted in a temporary loss of around 478 MW and unscheduled maintenance accounted for a temporary loss of about 502 MW. Completion of scheduled and unscheduled maintenance will continue to improve the amount of available capacity over time. Iraqi conservative operating practices and problems with fuel supplies seem to be resulting in lower than anticipated generation results despite large segments of generation capacity returning to the grid. Distributed Baghdad Power Consumption for the week ending 15 Jul was on average 1535 MW at peak, actual consumption would be higher without load shedding of up to 55 percent of likely demand (12 Hours of power according to last report dated 7 Jul). Continued operation of and security of key 400 kV power lines serving Baghdad will be critical to providing adequate power to Baghdad. Continued sabotage and resumed unrest will also impact the provision of fuel to power plants which would reduce the amount of available power in the summer. Currently fuel inventories are sufficient to cover most contingencies resulting in a one week loss of fuel imports in all areas except for Baghdad, but protracted refinery outages, or a major disruption of fuel convoys entering and traveling within Iraq would make it difficult for us to increase power supplies throughout the rest of the summer. Maintenance of sufficient crude oil and fuel oil stocks in Baghdad and continued operation of petroleum pipelines feeding the city will be critical to increasing and sustaining available power to the Baghdad area. Due to unforeseen problems we were unable to attain the 1 June or 30 Jun goals, but still hope to be able to reach 6000 MW/120,000 MWH in July. The top chart shows average daily power production in Mega Watt Hours (MWH). 120,000 MWH goal equates to 20 hours at 6000 MW average supplied load or 24 hours at 5000 MW average supplied load. Actual consumption this summer will likely be at least 7000-8000 MW at peak, possibly resulting in 15-18 hours of power for most Iraqis this summer when we reach 6000 MW � a vast improvement over last summer and also a vast improvement over previous years for most Iraqis outside of Baghdad. Currently supplies are not much much improved over last year when judged by hours of power, but this is at least partially due to an influx of new appliances dramatically altering demand and diluting the effect of increased generation capacity on actual results. Recent unrest and sabotage to oil and electricity infrastructure caused project delays making the 30 June target of 6000 MW unreachable. Uncertainty surrounding transition will likely lead to many, if not all, foreign contractors ceasing work for the next week or so, which could impact capacity growth by delaying projects for the next two to three weeks. Spare parts and major equipment will continue to encounter some delivery delays. Timely delivery will be reliant on the provision of convoy escorts. If instability increases again causing more workers to leave their job sites after the current transition related stand-downs, we will continue to see significant slippage in the schedules. 6000 MW could be achieved in July if all goes well, but further slippage is likely if additional unrest occurs over the next several weeks. The Spring maintenance program is winding down, but delays have stretched timelines, and units scheduled to be back on line before June 1 are still offline for maintenance. Also, it has come to our attention that many of the rehabs are superficial and have not added as much to capacity as expected. Some units are already returning from maintenance, and some units that we had planned to take off line for maintenance may be postponed to maximize capacity available as we enter the summer peak period. Units currently down for planned maintenance and rehabilitation on average over the past week resulted in a temporary loss of around 478 MW and unscheduled maintenance accounted for a temporary loss of about 502 MW. Completion of scheduled and unscheduled maintenance will continue to improve the amount of available capacity over time. Iraqi conservative operating practices and problems with fuel supplies seem to be resulting in lower than anticipated generation results despite large segments of generation capacity returning to the grid. Distributed Baghdad Power Consumption for the week ending 15 Jul was on average 1535 MW at peak, actual consumption would be higher without load shedding of up to 55 percent of likely demand (12 Hours of power according to last report dated 7 Jul). Continued operation of and security of key 400 kV power lines serving Baghdad will be critical to providing adequate power to Baghdad. Continued sabotage and resumed unrest will also impact the provision of fuel to power plants which would reduce the amount of available power in the summer. Currently fuel inventories are sufficient to cover most contingencies resulting in a one week loss of fuel imports in all areas except for Baghdad, but protracted refinery outages, or a major disruption of fuel convoys entering and traveling within Iraq would make it difficult for us to increase power supplies throughout the rest of the summer. Maintenance of sufficient crude oil and fuel oil stocks in Baghdad and continued operation of petroleum pipelines feeding the city will be critical to increasing and sustaining available power to the Baghdad area.

17. Power Production

Data as of 15 Jul UNCLASSIFIED UNCLASSIFIED N/P New Record: 13 Jul reached Peak Generation of 5,063 MW or 109,177 MWH The chart depicts power production by region. It does not show power transferred between regions to meet regional demands. For example: last week on average the power transferred from North to Central was 974 MW and from South to Central was 267 MW. Turkey provided 82 MW of electrical power and Syria provided 57 MW to islands of power in northern Iraq not currently fully integrated into the national grid. Though these two islands are connected, increased network stability and consistent frequency of 50 HZ is required before they can be fully integrated. The Kurdish regions has also been reconnected this summer after operating as a separate power grid for more than 10 years and their 250-300 MW of average generation should begin to add to grid stability and national generation figures soon as the generation surplus in this region begins to be shared with neighboring regions. Additionally, stand alone generators at fixed sites provide 329 MW that is not connected to the gridThe chart depicts power production by region. It does not show power transferred between regions to meet regional demands. For example: last week on average the power transferred from North to Central was 974 MW and from South to Central was 267 MW. Turkey provided 82 MW of electrical power and Syria provided 57 MW to islands of power in northern Iraq not currently fully integrated into the national grid. Though these two islands are connected, increased network stability and consistent frequency of 50 HZ is required before they can be fully integrated. The Kurdish regions has also been reconnected this summer after operating as a separate power grid for more than 10 years and their 250-300 MW of average generation should begin to add to grid stability and national generation figures soon as the generation surplus in this region begins to be shared with neighboring regions. Additionally, stand alone generators at fixed sites provide 329 MW that is not connected to the grid

18. Hours of Power

Data as of 15 Jul UNCLASSIFIED UNCLASSIFIED N/P The top chart shows average daily power production in Mega Watt Hours (MWH). 120,000 MWH goal equates to 20 hours at 6000 MW average supplied load or 24 hours at 5000 MW average supplied load. Actual consumption this summer will likely be at least 7000-8000 MW at peak, possibly resulting in 15-18 hours of power for most Iraqis this summer when we reach 6000 MW � a vast improvement over last summer and also a vast improvement over previous years for most Iraqis outside of Baghdad. Currently supplies are not much much improved over last year when judged by hours of power, but this is at least partially due to an influx of new appliances dramatically altering demand and diluting the effect of increased generation capacity on actual results The bottom chart depicts power production by region. It does not show power transferred between regions to meet regional demands. For example: last week on average the power transferred from North to Central was 974 MW and from South to Central was 267 MW. Turkey provided 82 MW of electrical power and Syria provided 57 MW to islands of power in northern Iraq not currently fully integrated into the national grid. Though these two islands are connected, increased network stability and consistent frequency of 50 HZ is required before they can be fully integrated. The Kurdish regions has also been reconnected this summer after operating as a separate power grid for more than 10 years and their 250-300 MW of average generation should begin to add to grid stability and national generation figures soon as the generation surplus in this region begins to be shared with neighboring regions. Additionally, stand alone generators at fixed sites provide 329 MW that is not connected to the gridThe top chart shows average daily power production in Mega Watt Hours (MWH). 120,000 MWH goal equates to 20 hours at 6000 MW average supplied load or 24 hours at 5000 MW average supplied load. Actual consumption this summer will likely be at least 7000-8000 MW at peak, possibly resulting in 15-18 hours of power for most Iraqis this summer when we reach 6000 MW � a vast improvement over last summer and also a vast improvement over previous years for most Iraqis outside of Baghdad. Currently supplies are not much much improved over last year when judged by hours of power, but this is at least partially due to an influx of new appliances dramatically altering demand and diluting the effect of increased generation capacity on actual results The bottom chart depicts power production by region. It does not show power transferred between regions to meet regional demands. For example: last week on average the power transferred from North to Central was 974 MW and from South to Central was 267 MW. Turkey provided 82 MW of electrical power and Syria provided 57 MW to islands of power in northern Iraq not currently fully integrated into the national grid. Though these two islands are connected, increased network stability and consistent frequency of 50 HZ is required before they can be fully integrated. The Kurdish regions has also been reconnected this summer after operating as a separate power grid for more than 10 years and their 250-300 MW of average generation should begin to add to grid stability and national generation figures soon as the generation surplus in this region begins to be shared with neighboring regions. Additionally, stand alone generators at fixed sites provide 329 MW that is not connected to the grid

19. Crude Oil Production

N/P Weekly Average of 2.041 MBPD Is Below Target of 2.5 MBPD Long Term Ministry of Oil (MOO) Target (Dec 04): 2.8 - 3.0 MBPD (Pre-War Capacity) Pre-War Peak: 2.5 MBPD in Mar 03 Post-War Peak: 2.595 MBPD on 16 Apr 04 MOO Goal: 2.5 MBPD UNCLASSIFIED UNCLASSIFIED Crude Oil Domestic Need Completely met by domestic crude production Domestically produced refined products (gasoline/benzene, diesel, kerosene, LPG) currently do not consistently meet domestic demand mainly because of continuing instability of electric power to refineries, secondarily because of sabotage - not because of insufficient crude oil Domestic production of gasoline/benzene, kerosene, diesel, LPG currently supplemented by imports Imports obtained by combination of DFI funds (through Defense Energy Support Center contractors), and barter deals by State Oil Marketing Organization (SOMO); SOMO is expected to take over for DESC by September 3.0 MBPD Pre-War Crude Production Capacity Last reached prior to first Gulf War Not met since because of international sanctions, Iraqi failure/inability to maintain/upgrade infrastructure, declining condition of equipment and facilities Note: MOO stands for Ministry of OilCrude Oil Domestic Need Completely met by domestic crude production Domestically produced refined products (gasoline/benzene, diesel, kerosene, LPG) currently do not consistently meet domestic demand mainly because of continuing instability of electric power to refineries, secondarily because of sabotage - not because of insufficient crude oil Domestic production of gasoline/benzene, kerosene, diesel, LPG currently supplemented by imports Imports obtained by combination of DFI funds (through Defense Energy Support Center contractors), and barter deals by State Oil Marketing Organization (SOMO); SOMO is expected to take over for DESC by September 3.0 MBPD Pre-War Crude Production Capacity Last reached prior to first Gulf War Not met since because of international sanctions, Iraqi failure/inability to maintain/upgrade infrastructure, declining condition of equipment and facilities Note: MOO stands for Ministry of Oil

20. Monthly Export: Volume & Revenue

N/P Current Monthly Average: No data for Jul No new data since 27 Jun (exports) and 28 Jun (revenue) UNCLASSIFIED UNCLASSIFIED Iraq-Turkey Pipeline (IT) SOMO issued tenders in March 2004 for the first time since June 2003 Second SOMO tender issued on 16 April 2004 Third SOMO tender issued on 27 May 2004 IT pipeline has reopened (not announced) and is slowly pumping crude to Ceyhan Southern Terminals: Al Basra Oil Terminal (ABOT) and Khor Al Amaya Oil Terminal (KAAOT) Repairs from sabotage and leaks from the two critical lines on the Al-Faw Peninsula have been fixed; production and export rates are steadily increasing Iraq Pipeline through Saudi Arabia (IPSA) NTR, line is closed Iraq-Syria-Lebanon Pipeline (ISLP) NTR, line is closed Iraq-Turkey Pipeline (IT) SOMO issued tenders in March 2004 for the first time since June 2003 Second SOMO tender issued on 16 April 2004 Third SOMO tender issued on 27 May 2004 IT pipeline has reopened (not announced) and is slowly pumping crude to Ceyhan Southern Terminals: Al Basra Oil Terminal (ABOT) and Khor Al Amaya Oil Terminal (KAAOT) Repairs from sabotage and leaks from the two critical lines on the Al-Faw Peninsula have been fixed; production and export rates are steadily increasing Iraq Pipeline through Saudi Arabia (IPSA) NTR, line is closed Iraq-Syria-Lebanon Pipeline (ISLP) NTR, line is closed

21. Diesel Production & Imports

This week�s average production and imports are 95% of goal National diesel stock is 19 days N/P Ministry of Oil (MOO) Goal: 18.0 M Liters UNCLASSIFIED UNCLASSIFIED Goal changed from 16 to 18 on 18 Oct 2003, to 20.9 during week of 02 - 06 Nov 2003, back to 18.0 on 07 Nov 2003, to 19.5 on 02 Apr, and back to 18.0 on 04 JuneGoal changed from 16 to 18 on 18 Oct 2003, to 20.9 during week of 02 - 06 Nov 2003, back to 18.0 on 07 Nov 2003, to 19.5 on 02 Apr, and back to 18.0 on 04 June

22. Kerosene Production & Imports

This week�s average production and imports are 93% of goal National kerosene stock is 34 days N/P Ministry of Oil (MOO) Goal: 5.0 M Liters UNCLASSIFIED UNCLASSIFIED Goal changed from 8 to 10 on 01 Oct 2003, to 12 during week of 17 - 23 Oct 2003, to 18.0 on 01 Nov 2003, to 6 on 02 Apr, to 4.5 on 01 May, and to 5.0 on 04 June Demand ranges from 7.7M liters/day (summer) to 10M liters/day (Fall) in November, then to 18M liters/day (Winter) in January before returning back to 10M liters/day (Spring) in March. Thus the 500M-liter kerosene reserve is required to offset the production/import shortfall during the winter months and ensure that homes are heatedGoal changed from 8 to 10 on 01 Oct 2003, to 12 during week of 17 - 23 Oct 2003, to 18.0 on 01 Nov 2003, to 6 on 02 Apr, to 4.5 on 01 May, and to 5.0 on 04 June Demand ranges from 7.7M liters/day (summer) to 10M liters/day (Fall) in November, then to 18M liters/day (Winter) in January before returning back to 10M liters/day (Spring) in March. Thus the 500M-liter kerosene reserve is required to offset the production/import shortfall during the winter months and ensure that homes are heated

23. Gasoline / Benzene Production & Imports

This week�s average production and imports are 84% of goal National benzene stock is 14 days N/P Ministry of Oil (MOO) Goal: 22.0 M Liters UNCLASSIFIED UNCLASSIFIED Goal changed from 15 to 18 on 01 Oct 2003, to 16 week of 03 - 09 Oct 2003, to 18 week of 17-23 Oct 2003, to 17.6 on 06 Nov 2003, to 18 on 09 Dec 2003, to 21 on 02 Apr, to 19 on 01 May, and to 22 on 04 June Goal changed from 15 to 18 on 01 Oct 2003, to 16 week of 03 - 09 Oct 2003, to 18 week of 17-23 Oct 2003, to 17.6 on 06 Nov 2003, to 18 on 09 Dec 2003, to 21 on 02 Apr, to 19 on 01 May, and to 22 on 04 June

24. Liquefied Petroleum Gas Production & Imports

This week�s average production and imports are 103% of goal National LPG stock is 35 days N/P Ministry of Oil (MOO) Goal: 4,000 Tons UNCLASSIFIED UNCLASSIFIED Goal changed from 4100 to 3200 on 01 Oct 2003, to 4,125 week of 03 - 09 Oct, to 4,600 week of 17 - 23 Oct 2003, to 6300 on 6 Nov 2003, to 6500 on 9 Dec 2003, and to 5500 on 17 Feb. The latest drop to 5,500 tons was due to the oncoming of spring. However, it was increased to 6000 on 09 Mar due to low inventories. Goal changed to 4,800 tons on 02 Apr and to 4,000 tons on 04 JuneGoal changed from 4100 to 3200 on 01 Oct 2003, to 4,125 week of 03 - 09 Oct, to 4,600 week of 17 - 23 Oct 2003, to 6300 on 6 Nov 2003, to 6500 on 9 Dec 2003, and to 5500 on 17 Feb. The latest drop to 5,500 tons was due to the oncoming of spring. However, it was increased to 6000 on 09 Mar due to low inventories. Goal changed to 4,800 tons on 02 Apr and to 4,000 tons on 04 June

25. Ministry of Interior Man, Train & Equip Status

CIF ERU IPS DBE TRAINED AND EQUIPPED FORECAST CURRENT STATUS N/P UNCLASSIFIED UNCLASSIFIED

26. Ministry of Defense Man, Train & Equip Status

CURRENT STATUS TRAINED AND EQUIPPED FORECAST ARMY ING IIF N/P UNCLASSIFIED UNCLASSIFIED

27. Security - Developments

N/P UNCLASSIFIED UNCLASSIFIED Prime Minister Allawi announced the establishment of a new intelligence unit, the General Security Directorate, that will target insurgents The Iraq Intervention Force (IIF) is being established, trained, and equipped for urban counterinsurgency operations The initial IIF battalion deployed into Baghdad at the end of Jun All three battalions of the first IIF brigade will be ready by end of Jul On 08 Jul, 39 of 45 battalions of the Iraqi National Guard (ING) were manned above 75 percent strength Currently conducting joint patrols throughout Iraq with Coalition and Iraqi Police forces Focus on equipping, training, and reconstituting the force A new pilot program to increase police effectiveness started in Baghdad by a team of police advisors consisting of Iraqi police and military personnel Will focus on longer-term strategies to increase effectiveness ranging from personnel, mission and tasks, equipment and community relations

28. Security - Developments (Cont.)

N/P UNCLASSIFIED UNCLASSIFIED A total of 5,502 new IPS recruits completed academy training Five classes (over 3,411 students) graduated from the Jordan Academy Four classes (2,091 students) graduated from the Baghdad Public Safety Academy Approximately 25,000 IPS personnel who served as police under the former regime completed a three-week Transition and Integration Program taught by Coalition Coalition advisors are providing professional development training for IPS officers. The number of IPS graduates from these courses: Basic Criminal Investigation 130 (target 1,200) Criminal Intelligence Course 64 (target 120) Emergency Response 40 Dignitary Protection 109 Mid-level Management 42 (target 300) Executive Leadership Course 53 (target 300)

29. Security - Developments (Cont.)

N/P UNCLASSIFIED UNCLASSIFIED Chart below shows significant insurgent activities in Iraq to 26 Jun (update should be available next week) Includes attacks using improvised explosive devices (IED), vehicle-borne IED, mortars, rocket propelled grenades (RPG), and improvised rockets

30. Stability Contributors - OIF