ORIGINAL: ENGLISH
1. The present report is submitted pursuant to paragraph 10 of resolution
1153 (1998) of 20 February 1998, in which the Security Council requested the
Secretary-General to submit an interim report 90 days after entry into force of
paragraph 1 of the resolution, on the basis of observation by United Nations
personnel in Iraq and consultations with the Government of Iraq, on whether Iraq
had ensured the equitable distribution of medicine, health supplies, foodstuffs,
and materials and supplies for essential civilian needs. In accordance with
paragraph 5 of resolution 1153 (1998), the enhanced distribution plan was
submitted by the Government of Iraq on 27 May 1998. The Secretary-General
approved it on 29 May 1998, and a new 180-day period commenced at 0001 hours
eastern standard time on 30 May 1998. The present report provides information
up to 31 July 1998 on the distribution of humanitarian supplies throughout Iraq,
including the implementation of the United Nations Inter-Agency Humanitarian
Programme in the three northern governorates of Dahuk, Erbil and Sulaymaniyah.
The delivery and distribution of inputs under resolutions 986 (1995),
1111 (1997) and 1143 (1997) continue. The present report describes developments
in the implementation of the programme since the previous report (S/1998/477)
and reviews the impact of the programme as a whole. The first approval of
supplies under resolution 1153 (1998) took place in June 1998.
2. Since the beginning of the current phase, the oil overseers and the
Security Council Committee established by resolution 661 (1990) have reviewed
and approved a total of 46 contracts involving purchasers from 19 countries.
The total quantity of oil approved for export under those contracts corresponds
to approximately 295 million barrels for 180 days - the highest amount since the
beginning of the programme. It should be noted that the average quantity of oil
exported from Iraq has increased from 1.44 million barrels per day during the
previous 90-day period, to 1.7 million barrels per day during the current
reporting period. Concurrently, during this phase, oil prices for Iraqi crude
have decreased to less than $10 per barrel. At current prices, total revenue
projected for this phase is estimated at $2.86 billion. After the deduction of
the minimum pipeline fee of $140 million, and the allocation of revenue as set
out in paragraphs 8 (a) through (f) of resolution 986 (1995), an amount of
approximately $1.79 billion would be available to finance the humanitarian
supplies authorized in resolution 1153 (1998) and the oil spare parts and
equipment authorized in resolution 1175 (1998). This amount falls far short of
the funds required to implement fully the enhanced distribution plan, namely,
$3.1 billion. Under each of the previous three phases, $1.32 billion were made
available for the humanitarian programme. It may be recalled that in my letter
dated 15 April 1998 (S/1998/330 and Corr.1), I had indicated that according to
the group of experts established pursuant to paragraph 12 of resolution
1153 (1998), should the current average price of $10.50 per barrel for Iraqi
crude oil remain unchanged, based on the existing capacity of 1.6 million
barrels per day, revenues in the amount of only $3 billion could be achieved
during a 180-day period, starting in June 1998, provided the spare parts
required were ordered immediately.
3. As at 31 July 1998, the export of petroleum from Iraq under the current
phase was proceeding smoothly. Seventy-one liftings, totalling 90 million
barrels at an estimated value of $843 million, have been completed. About
52 per cent of the loadings have been made at Ceyhan, Turkey.
4. The oil overseers have continued to advise and assist the Security Council
Committee on the pricing mechanism, contract approvals and their modifications,
and other questions related to exports and monitoring under resolution
986 (1995) and all subsequent relevant resolutions. The overseers and the
independent oil inspection agents, Saybolt Nederland BV, deployed to observe oil
loadings and transfers, have also worked closely together to monitor the
relevant oil installations.
5. The United Nations Iraq Account is divided into seven separate funds
pursuant to paragraphs 8 (a) to (g) of Security Council resolution 986 (1995).
As at 31 July 1998, of the $5.256 billion authorized under resolution
1153 (1998) for the 180-day period starting 30 May 1998 (phase IV),
$388.9 million had been deposited into the account for this period, bringing the
total oil proceeds deposited to the Account since inception to $6,748.5 million.
Annex I shows the allocation of the total oil among the various funds and the
corresponding expenditures to date.
6. In accordance with paragraph 14 of the Memorandum of Understanding between
the United Nations and the Government of Iraq (see S/1996/356), the United
Nations Board of Auditors is currently finalizing its second report on the
United Nations Iraq Account and the Iraq Programme. The first report of the
Board of Auditors, covering the period 10 December 1996 to 30 June 1997, was
submitted to me on 8 June 1998, and forwarded to the Government of Iraq and the
Security Council Committee on 12 June 1998.
7. In its first report, the Board of Auditors expressed appreciation that the
operations of the Iraq Programme had been reorganized under a single command.
The Office of the Iraq Programme, as well as other departments and offices
concerned, are taking the necessary action to implement the recommendations of
the Board of Auditors.
C. Prioritization, processing and approval of applications,
delivery to Iraq and distribution to end-users
8. During the reporting period, the Office of the Iraq Programme processed
applications for both phase III and the current phase under the enhanced
distribution plan. Simplified procedures for approving applications for
foodstuffs were set out by the Security Council Committee in its report of
17 April 1998 (S/1998/336, appendix), whereby a pricing mechanism for the
procurement of foodstuffs listed in the annexes to the distribution plan was to
be submitted by the Government of Iraq for review by the Committee. Such a
pricing mechanism has not yet been submitted by the Government of Iraq, and the
simplified procedures have therefore not been implemented.
9. The current status of phase III and enhanced distribution plan applications
received as at 31 July 1998, is presented in the table in annex III. In
accordance with the Committee's procedures, the Office of the Iraq Programme
continued to circulate for its consideration and approval applications in
advance of the availability of funds, on the understanding that approval letters
would be released by the Secretariat only after confirmation that sufficient
funds were available. For phase III, 52 approval letters valued at $90,664,285
were awaiting the availability of funds. The rate at which these letters can be
issued depends mainly on reimbursements from the ESC (13 per cent) account to
the ESB (53 per cent) account. For the enhanced distribution plan, 50 approval
letters valued at $222,954,202 were awaiting issuance. This was due primarily
to revenue shortfalls resulting from low oil prices.
10. Within the framework of the priorities established under the enhanced
distribution plan, contracts for oil spare parts and equipment have been
processed on a first-come, first-served basis. Special accounting and banking
procedures for financing approved contracts on a proportionate basis from the
ESB (53 per cent) and ESC (13 per cent) accounts, as directed by the Security
Council Committee, have been developed and implemented. A separate database and
tracking system have been established to monitor the processing of applications,
authentication of arrival of spare parts and equipment in Iraq, and onward
observation of their storage, installation and end-use. There were significant
initial delays in the circulation of many contracts, mainly owing to
discrepancies between quantities and prices of items listed in the enhanced
distribution plan and the applications received. As at 31 July 1998,
34 applications for oil spare parts and equipment had been received by the
Secretariat, of which nine had been circulated to the Committee, with three
approved and one on hold. Of the 25 contracts not circulated, 24 were returned
to submitting missions for clarifications related primarily to pricing or to
quantities as set out in the enhanced distribution plan; one was still under
review by a customs expert. Applications have been arriving in good time, and
the inclusion by the Government of Iraq of direct reference in more recent
contracts to the applicable codes and item descriptions in the enhanced
distribution plan has facilitated the processing of those applications. With
the increased number of customs experts and corresponding support staff, as well
as increased consultation with Saybolt Nederland BV, the rate of processing and
submission of contracts for oil spare parts and equipment to the Committee for
approval has improved.
11. With respect to the ESC (13 per cent) account, 273 phase III applications
had been submitted as at 31 July 1998, of which 265 were approved. Thirty-three
enhanced distribution plan applications had been submitted, with 30 approved and
3 pending. As the number of amendments to applications submitted by United
Nations agencies and programmes remains high, the attention of agencies and
programmes is drawn to paragraph 56 of my report of 1 February 1998 (S/1998/90),
in which they were urged to submit applications once the details of contracts
were worked out in order to avoid delays caused by such amendments.
12. The Office of the Iraq Programme is in the process of establishing a
comprehensive integrated information system to improve and expedite the
provision of authoritative information on the progress of applications from
contracting through distribution, and on the implementation of the programme as
a whole, pursuant to my directive contained in paragraph 53 (h) of my report of
1 February 1998 (S/1998/90).
13. The United Nations independent inspection agents, Lloyd's Register,
continue to authenticate the arrival of humanitarian supplies at the entry
points in Al-Walid, Trebil, Umm Qasr and Zakho. The number of Lloyd's Register
inspectors has been increased from 42 to 54 to ensure inspection and
authentication services for the expected increase in imports of humanitarian
supplies, as provided for under the enhanced distribution plan, and in response
to paragraph 53 (j) of my report of 1 February 1998 (S/1998/90), in which I
directed the Office of the Iraq Programme to enhance the capacity of the
independent inspection agents to authenticate and provide quality control of the
commodity flows expeditiously; to ensure that they report to the Office of the
Iraq Programme and to the United Nations Office of the Humanitarian Coordinator
in Iraq the authentication of the arrival of supplies within 24 hours; and to
enhance their capacity to perform quality tests within the shortest period
technically feasible, as well as to perform quality tests inside Iraq. To this
end, the new contract with Lloyd's Register also provides for a mobile
laboratory. Discussions between the Office of the Iraq Programme and the
Government of Iraq are under way to determine where the mobile laboratory will
be located. Under the enhanced distribution plan, Lloyd's Register will also
authenticate the arrival of humanitarian supplies procured under the United
Nations Inter-Agency Humanitarian Programme for the three governorates of Dahuk,
Erbil and Sulaymaniyah.
14. In its resolution 1175 (1998) of 19 June 1998, the Council authorized
States to permit the export to Iraq of the necessary parts and equipment to
enable Iraq to increase the export of petroleum and petroleum products in
quantities sufficient to produce the sum established in paragraph 2 of
resolution 1153 (1998), and requested the Security Council Committee, or a panel
of experts appointed by the Committee, to approve contracts and equipment
according to lists of parts and equipment approved by the Committee for each
individual project.
15. During the reporting period, after consultations with the Committee and the
Government of Iraq, a monitoring mechanism was established in Iraq by the Office
of the Iraq Programme, utilizing the expertise provided by Saybolt Nederland BV,
and in conjunction with Lloyd's Register, to ensure effective monitoring of oil
spare parts and equipment, from approval to delivery in Iraq, as well as storage
and utilization. The monitoring mechanism was finalized in July 1998, and a
report was submitted to the Committee by the Office of the Iraq Programme on
28 July 1998.
16. Three central storage sites were established, one in the area of Kirkuk,
one in Basrah and a smaller facility in Baghdad. The monitoring team consists
of three members, including the chief of the team, based in Baghdad, with
frequent visits to the storage sites to ensure appropriate implementation. The
Government of Iraq has provided accommodations and office space for the monitors
and has given assurances of full cooperation and full and free access to all
facilities as required by the monitors to fulfil their task. As at
31 July 1998, the only spare parts and equipment that had arrived in Iraq were
supplied under a contract approved by the Security Council Committee during
phase III. They were placed into storage in the Kirkuk facility, to be utilized
for the Kirkuk-Yumurtalik pipeline.
17. In order to increase the coherence of observation activities conducted
under resolution 986 (1995), sectoral, geographical and multidisciplinary
observers began to implement a forward-looking quarterly observation plan,
starting with the period from June to August 1998. Implementation of this plan
has reduced the need for multiple visits in the food, health and education
sectors. With respect to electricity and agriculture, the degree of specialist
expertise needed for effective observation and assessment has required a more
narrow focus for the Geographical Observation Unit. Training has been provided
by both the sectoral agencies and the Multidisciplinary Observation Unit, and
observation has been initiated in all sectors. To meet the requirement for
greater coverage and technical expertise, available posts will increasingly be
filled by specialists.
18. In the food sector, World Food Programme (WFP) international observers
track commodities at the warehouse level, and national staff in each governorate
conduct spot checks at food agents and households under the supervision of
international staff. WFP observers visit all warehouses and silos weekly and
all mills monthly. A random sampling methodology has been adopted, and, to
date, about 80 per cent of all food agents have been visited at least once.
Because sampling has been based on population density, food agents serving less
populated areas receive less attention. WFP is considering ways to ensure that
the remaining 20 per cent is covered by December 1998. The Geographical
Observation Unit has reviewed the efficiency and cost of transportation, the
effect of power cuts on flour processing and distribution, and the accuracy of
receipts and disbursement records. Regular tracking of food commodities has
been assigned to WFP.
19. In the health sector, the World Health Organization (WHO) has tracked a
wide variety of drugs and supplies and has focused on drug supply and
distribution, the quality of drug management and the utilization and dosage
forms of selected drugs. The Geographical Observation Unit has assessed the
extent of transportation problems, the extent and effectiveness of the cold
chain, the timeliness of arrivals, the quality control process for selected
items, distribution to governorate warehouses and end-user facilities, and the
efficiency of distribution to private pharmacies. In the next observation plan,
WHO intends to provide more in-depth analysis of the adequacy and effectiveness
of health services, so as to encourage improved prescription practices.
20. In the water and sanitation sector, United Nations Children's Fund (UNICEF)
observers have maintained complete tracking of chlorine supplies. A productive
division of labour has been agreed on with the Geographical Observation Unit so
that the central warehouses and 50 per cent of the water treatment plants in all
15 governorates in the centre and south of Iraq can be covered every four rather
than every seven weeks. A standardized set of indicators has been developed to
quantify plant performance before and after installation of equipment supplied
under resolution 986 (1995). In order to utilize the greatly increased
allocation in the enhanced distribution plan, a much more thorough understanding
of the state of the whole network is required, including the requirements of
individual plants. It is expected that a UNICEF survey will start within the
next three months.
21. In the agricultural sector, observation by the Food and Agriculture
Organization of the United Nations (FAO) has concentrated on tracking the
distribution of inputs. FAO, in collaboration with the Geographical Observation
Unit, assessed the equitability and adequacy of agrochemicals, and, in
collaboration with the Geographical and Multidisciplinary Observation Units,
spare parts for tractors and combine harvesters. Local staff, supervised or
accompanied by international observers where appropriate, have made a valuable
contribution to the collection of data required by the programme. The
Multidisciplinary Observation Unit has continued to focus on the distribution
and adequacy of agricultural inputs, the rational prescription of veterinary
drugs and vaccines, and the connection between animal and human disease.
22. In the electricity sector, United Nations Development Programme (UNDP)
international observers and national assistants cover all 15 governorates of the
centre and south of Iraq every two months. Goods have been checked against
their specifications from waybills and purchase orders. The UNDP staffing level
is sufficient for observing the current level of phase I arrivals. As phase II
and III deliveries increase, so will the observation capacity of UNDP. Although
the Ministry of Industry expressed initial reservations about the quarterly
(three-month) observation plan, routine observation of this sector has proceeded
smoothly in practice, with few delays. All equipment subject to tracking and
observation was found to be in storage or installed at the relevant warehouse or
project site.
23. In the education sector, fewer observations were conducted at schools
during the reporting period because these are only open for a limited time on
Tuesdays and Saturdays during the summer vacation. The slow distribution of
supplies from governorate warehouses to schools has also limited observation at
the end-user level. The observation capacity of the United Nations Educational,
Scientific and Cultural Organization (UNESCO) has not been adequate in the past
owing to a failure to deploy staff. When the planned deployment of staff takes
place, UNESCO will be able to pay more attention to schools in remote areas.
UNICEF observation teams cover warehouses and schools throughout the
15 governorates of the centre and south of Iraq over a seven-week cycle.
IV. PROGRAMME IMPLEMENTATION: EFFECTIVENESS, EQUITABILITY
AND ADEQUACY
Food and nutrition
24. As at 31 July 1998, foodstuffs valued at $2,045,202,559 or 78 per cent of
the allocation under phases I to III, had been delivered to end-users in the
centre and south of Iraq (see annex VI.A for further details). About
75 per cent of the enhanced distribution plan allocation had been contracted by
the Ministry of Trade. Stocks are sufficient for distribution at the level
established for phases I to III during September and October 1998. Although the
contract processing rate of the Security Council Committee has improved
considerably, the Ministry of Trade did not expect to be able to implement the
enhanced basket (with a caloric value of 2,300 kilocalories per person per day)
before October 1998, since delivery rates had not improved. The Ministry has
stated two main reasons for this: continuing problems in the handling of
letters of credit and, over phases I to III, about $161 million awaiting
transfer from the ESC (13 per cent) to the ESB (53 per cent) account under the
bulk purchasing arrangement. This has prevented authorized food contracts from
being funded in an efficient manner. During the reporting period, none of the
monthly food baskets delivered was complete, but the Government of Iraq
supplemented some of the shortfalls from its stocks. The ration of pulses was
reduced from 1.5 kilograms per month to 1 kilogram per month. As a result of
the below-target food rations, the average caloric value of the basket was only
95 per cent of the previous target under phases I to III, namely,
2,030 kilocalories per person per day. Losses from entry point to warehouses
were limited to 0.05 per cent, and inter-governorate transfers to compensate for
shortages amounted to only 3 per cent of the total volume of goods distributed.
Flour mills now produce more refined flour because of the preference for white
bread. Unfortunately, this will have an adverse nutritional impact, as most of
the necessary vitamin B and minerals are provided in the bran, which is
discarded. Although the nutritional supplies provided under the enhanced
distribution plan have yet to reach Iraq, the Ministry of Health is reviewing
the effectiveness of existing distribution arrangements.
Health
25. As at 31 July 1998, medicine valued at $313,440,420, had arrived in the
centre and south of Iraq, of which $98,533,794, or 16 per cent of allocations
under phases I to III, has been delivered to end-users (see annex VI.C for
further details). The low delivery rate to end-users is due to delays in
quality testing, the retention of stocks for emergency needs, time required for
drawing up allocation plans for newly arrived supplies, inadequate information
on actual requirements of end-users, poor communications between health
facilities and warehouses, and shortage of transport, labour, materials and
funding to install equipment. The Iraqi State Company for Importation of Drugs
and Medical Supplies (Kimadia) and WHO are considering a range of initiatives to
reduce bottlenecks at various stages of distribution. The contract approval
process for the health sector has seen a marked improvement. Whereas about
80 per cent of phase II contracts were signed only during the last two months of
the phase, phase III contracting was spread throughout the whole period, and
goods have begun to arrive. Only five applications remain on hold under
phase III. As at 31 July 1998, Kimadia had concluded 50 contracts, representing
about 16 per cent of the allocation under the enhanced distribution plan. It is
expected that 80 per cent of the contracting process will be completed by the
end of September 1998. Although this should lead to an improved flow of
supplies, the major constraint remains the performance of suppliers. With an
increasing volume and range of medical supplies reaching Iraq, the Ministry of
Health is attempting to increase the flow of supplies by automatic distribution
of 75 per cent of supplies, but retaining, where supply levels permit, a
25 per cent stock to respond to subsequent demand from governorates.
26. Nevertheless, with the arrival of more than half of phase II supplies, the
quantities in stock and the range of drugs available have increased
significantly. Tracking has shown that, with very few exceptions, equitable
distribution of available drugs to governorates has been assured, and that,
within governorates, national guidelines have, by and large, been adhered to in
deciding final allocations to individual health facilities. Public health
facilities continue to receive a greater share of deliveries than the private
sector. This is reflected in increased attendance at public health clinics,
many of which received supplies under resolution 986 (1995) for the first time
during the reporting period. Priority continues to be given to ensuring, where
possible, full treatment to hospital inpatients, whereas drugs are still
rationed to outpatients. The Ministry of Health is introducing a drug card
scheme to restrict the tendency towards over-consumption of drugs by limiting
the number of prescriptions available from pharmacies per month, though this
does not apply to pharmacies within hospitals. WHO is promoting better
prescription practices so that doctors are made aware of the importance of
rigorous treatment protocols. It is easier to see the impact of supplies at the
point of end-use rather than on the health system as a whole.
Water and sanitation
27. As at 31 July 1998, chemicals, supplies and equipment for water and
sanitation valued at $30,164,882 had arrived in the centre and south of Iraq, of
which $11,589,478, or some 16 per cent of allocations under phases I to III,
have been delivered to end-users (see annex VI.E for further details). The low
delivery rate is due to critical shortages of staff, materials and funding for
the installation of equipment and the lack of complementary inputs. The
equipment remains in storage while allocation plans are being revised. In the
water and sanitation sector, there has been a reduction in contract approval
time, and the rate at which commodities are arriving has continued to improve.
Difficulties have been encountered when supplies were not in conformity with
specifications or were missing accessories needed to make them operational.
This reflected an insufficient match between individual plant requirements and
equipment ordered, and the lapse of time since original procurement decisions.
The rate of distribution from the central warehouse to water treatment plants
has varied according to the project, as the water authorities await the
necessary implementation budgets and staff to undertake the substantial
installation and commissioning involved. Therefore, the full benefit of inputs
delivered to date has not yet been felt.
28. Although there is an extreme shortage of supplies and spare parts for many
plants, the arrival of inputs under the programme provided for under resolution
986 (1995) has led to improvements. Preliminary estimates suggest that the
capacity of treatment plants has been improved, but to achieve further
improvements in operational capacity, many plants require major repairs. With
many plants working at or near maximum capacity, the risk of further breakdowns
is high. It appears that the most positive impact has been in the provision of
treatment chemicals. A pilot survey of water quality and health indicators in
selected districts in Baghdad showed lower bacteriological contamination of
water supplies and fewer cases of amoebic dysentery, giardiasis and diarrhoea in
health facilities. The improved water test results is related to chlorination
levels. Test results from the other governorates also indicate improvements,
although water supply remains restricted. Except in very localized instances,
it is possible to indicate trends but not to measure exact impact. It is
difficult to distinguish the impact of commodities supplied under resolution
986 (1995) from those supplied by the water authorities and non-governmental
organizations. It is questionable whether inputs alone will be sufficient to
offset the limitations of system design, the wastage of water by consumers,
which contributes to insufficient pressure in the network, or the continuing
decay of the system as a whole. One area of continuing concern is the
sanitation sector, where insufficient equipment and supplies for sewage
treatment plants were provided under phase I. While sanitation tankers for
emptying septic tanks, jetting equipment to clean clogged sewers and sewage
pumps have been delivered and are in use, sewage treatment plants are
functioning at such a low level that major investment is required before any
reduction in sanitation-related disease is likely.
Agriculture
29. As at 31 July 1998, agriculture inputs valued at $25,454,451, had arrived
in the centre and south of Iraq, of which $15,953,324, or 22 per cent of
allocations under phases I to III, have been delivered to end-users (see
annex VI.G for further details). The low distribution rate is due to the fact
that many inputs are tied to seasonal requirements and to slow allocation to
end-users. Measures have now been taken to improve forward planning. In the
agricultural sector, aerial crop spraying using pesticides supplied under
resolution 986 (1995) is estimated to have saved at least 30 per cent of the
cereal harvest and 35 per cent of the date harvest since April 1998.
Infestation has been fully controlled in treated sugarcane fields. FAO states
that it has ensured 100 per cent control over dual-use helicopter spare parts.
Some agro-chemicals released to end-users during the current cropping season
were in storage for several months because they were delivered too late for the
spraying season. FAO attributes delays in distributing veterinary drugs to
shortages of chemical reagents and equipment for quality control testing,
delayed pricing of inputs, and the intermittent arrival of inputs, making it
uneconomical to distribute small quantities. At the governorate level, all
state agricultural services face problems with transportation and laboratory and
treatment equipment and facilities. The Government has sought to safeguard the
effective use of supplies by deterring farmers from selling the inputs they
receive, which are attractive since they are cheaper and of better quality than
similar commodities available on the local market. Farmers' individual
requirements are reviewed by the relevant authorities before authorization to
purchase supplies is given. Actual distribution equalled 90 per cent of
provisional allocation plans. As in the health sector, it is inevitable that
some specialist equipment and supplies will only be utilized effectively by
specific facilities. One instance of such a facility in private ownership
receiving an apparently disproportionate allocation of poultry vaccine has been
observed. Its justification by the Ministry of Agriculture has been noted and
is subject to further observation.
30. Any impact assessment is rendered difficult by the nature of the production
processes involved. In the agricultural sector, the impact of inputs provided
under resolution 986 (1995) is affected by climate, disease or pest prevalence
and the efficiency of state extension services. Use of other inputs, of varying
quality, is an additional critical factor, which should be known when estimating
the relevance and significance of particular supplies. Although the size of the
agricultural machinery and vehicle fleet is known with some accuracy, data for
other sectors are less satisfactory, notably with respect to livestock
population or productivity. For example, animal population figures included in
the phase I distribution plan are a projection based on a 1986 census. A repair
cost ratio calculation suggests that spare parts for tractors and combine
harvesters meet just under 20 per cent of the requirement, slightly above the
overall adequacy rating of 13 per cent for other types of spare parts. The
agricultural spraying helicopters have now completed 1,500 hours of flying time
since their last overhaul, and the provision of spare parts is no longer
sufficient to maintain the airworthiness of those aircraft. In fact, no further
aerial crop spraying can take place until they are either overhauled by the
manufacturer or replaced. United Nations experts are still reviewing the
effectiveness of a wide range of procurement and prescription decisions in the
veterinary subsector. The Ministry of Agriculture also relies on imports and
indigenous production of veterinary supplies outside the framework of resolution
986 (1995), although FAO is not in a position to assess the volume or adequacy.
Electricity
31. As at 31 July 1998, electricity equipment valued at $25,950,000, had
arrived in the centre and south of Iraq, of which $23,550,000, or 22 per cent of
allocations under phases I to III, have been delivered to end-users (see
annex VI.F for further details). In comparison to other sectors, the slower
rate of arrivals reflects the nature of the equipment and materials procured.
However, the efficient distribution of goods on arrival is notable. In the
electricity sector, the pace of arrival of goods has increased during the
reporting period. Over the next three months it is expected that all phase I
supplies, half of phase II and just under a third of phase III supplies will
have reached Iraq. Because of the site-specific nature of most power station
equipment, equity cannot be based on distribution. Set percentage allocations
determine the share of the four electricity distribution authorities in the
15 governorates of the centre and south of Iraq.
32. It is possible to measure the impact of commodities on specific units, but
not on the system as a whole. For example, the output of generation units at
Baiji power station has increased through the provision of special steel
baskets, and the number of shutdowns has been reduced. However, with demand far
outstripping supply during the summer months, no benefit is felt by the
consumer. The change of circuit breakers in electrical substations leads to
more reliable, but not greater, power supply. When power cuts occur, as they
have to an unprecedented extent in recent months, it is not possible to
determine, without access to system-wide data, whether this was due to planned
load-shedding or the failure of transformers. Information on this subject is
awaited from the relevant authorities in Iraq.
Education
33. As at 31 July 1998, education supplies valued at $14,896,863, had arrived
in the centre and south of Iraq, of which $5,262,735, or 15 per cent of
allocations under phases I to III, have been delivered to end-users (see
annex VI.H for further details). The slow rate of distribution is related to
lack of complementary inputs, shortage of staff, materials and funding, erratic
arrivals hindering efficient planning, manifestly inadequate transport and the
need to undertake most substantial infrastructure repairs during the school
holidays. In the education sector, there has been a reduction in the time taken
to approve contracts over phases I to III, and the rate at which commodities
arrive continues to improve. However, lack of complementary items has delayed
the full utilization of materials already delivered. The Ministry of Education
printing press, for production of all primary and secondary education school
books in Arabic, has not been able to resume operations because an application
for control computers and desktop publishing software is on hold in the Security
Council Committee. Suppliers have also failed to deliver according to
specification a range of school rehabilitation materials. Distribution of
supplies to governorates has been slow mainly because of an extreme lack of
transport, which the Ministry of Education has started addressing in phase III,
and because of concern about theft of building supplies from schools. The
Ministry started major rehabilitation at the end of school exams in June 1998.
School supplies and teaching aids have been distributed, and allocations have
been spread among as many schools as possible. A major impediment to speedy
rehabilitation has been the lack of funds for local labour and materials.
Governorate education officials recently indicated that the Ministry had
allocated 250,000 Iraqi dinars per school to fund implementation costs. Unless
the Ministry of Education is more successful in borrowing transport from other
ministries and manages to provide additional funding, as it has offered, it
seems unlikely that substantial progress will be made in time for the start of
the new school year in September 1998.
Food and nutrition
34. As at 31 July 1998, foodstuffs and related items valued at $261,087,542, or
71 per cent of allocations under phases I to III, have been delivered to end-users (see annex VI.A for further details). During the reporting period, WFP
continued to distribute some 52,000 tons of food and related items monthly. The
ration made available was the same as in the 15 governorates of the centre and
south of Iraq. In order to ensure the equitable distribution of the food
ration, WFP has continued to assist the local authorities to issue ration cards.
WFP also checks the accuracy of registration data in the three governorates of
Dahuk, Erbil and Sulaymaniyah over a six-week period. Double registration,
exacerbated by the continuing movement of population, primarily between Erbil
and Sulaymaniyah, has remained a problem. Using regularly updated screening,
WFP has identified some 126,000 cases since the inception of the programme.
Since January 1998, some 11,117 individuals, including 2,300 during the
reporting period, have been relocated.
35. As at 31 July 1998, therapeutic milk, supplementary foodstuffs and related
items for the nutrition sector, valued at $15,679,731, had arrived in the three
governorates of Dahuk, Erbil and Sulaymaniyah, of which $14,737,452, or
59 per cent of the allocations under phases I to III, have been delivered to
end-users (see annex VI.B for further details). According to UNICEF, its latest
nutrition survey showed that the incidence of acute malnutrition requiring
hospitalization has fallen to below 3 per cent of children under five years old.
UNICEF provides therapeutic milk and high protein biscuits for such children.
WFP has focused on providing supplementary foodstuffs to families with
malnourished children, as an incentive to safeguard their consumption of special
nutritional supplements. Problems encountered earlier this year with
uncoordinated supply of milk and supplementary foodstuffs have been resolved.
UNICEF is also working to train staff in 172 health centres which have received
anthropometric equipment. UNICEF has pointed out that chronic malnutrition,
which affects an estimated 25 per cent of the population of children under five
years old, is not directly reversible by supplementary feeding alone. It is a
function of poor feeding practices by parents, limited access to basic
preventive health care, shortage of safe drinking water, poor sanitation and
illiteracy. Better coordination is required by the Inter-Agency Humanitarian
Programme to improve the nutritional status of those most at risk.
Health
36. As at 31 July 1998, medicine and ambulances, valued at $21,114,650, had
arrived in the three governorates, of which $15,656,244, or 20 per cent of
allocations under phases I to III, have been delivered to end-users (see
annex VI.C for further details). As at 31 July 1998, medical equipment valued
at $12,775,921, had arrived in the three governorates, of which, $11,539,475, or
38 per cent, of allocations under phases I to III, have been delivered to
hospitals (see annex VI.D for further details). WHO receives and distributes
medicines and medical supplies procured under the bulk purchase arrangement with
the Government of Iraq. Low handling capacity in Kimadia's warehouses
contributed to the fact that only 27 per cent of commodities received have been
distributed to governorates. In general, there is a good flow of drugs. Health
authorities have complained that they lack information from Kimadia on the
release of drugs after quality tests in Baghdad, but WHO notes that this would
be accessible through more effective use of the WHO Microdrug database. WHO
also procures medical equipment and health infrastructure supplies. Equipment
trans-shipped through Turkey has been subject to an average delay of three
months. WHO is rehabilitating nursing and midwifery schools and water quality
control laboratories so as to provide a suitable environment for test equipment
already received.
37. The improved flow of drugs is restoring the credibility of the health-care
system. Consequently, most facilities are witnessing a dramatic increase in the
number of patients. Some families have been reported to sell their prescription
medications, although the extent of this abuse is unknown. WHO is seeking to
educate practitioners in better drug management and prescription practices.
Despite the greater availability of drugs, the incidence of infectious and
parasitic disease appears to be increasing. The absence of an effective
epidemiological surveillance system makes it difficult to identify and monitor
high-risk populations and areas, and disease trends, or to measure the impact of
the humanitarian initiatives carried out under Council resolution 986 (1995).
Water and sanitation
38. As at 31 July 1998, chemicals, supplies and equipment valued at $20,068,561
had arrived in the three governorates, of which $15,911,870 (cash component
included), or 26 per cent of the allocations under phases I to III, have been
delivered to end-users (see annex VI.E for further details). In the water and
sanitation sector, UNICEF has accelerated procurement by earlier identification
of full specifications and costings and more timely submission of applications
to the Security Council Committee. While UNICEF activities were only undertaken
previously in urban areas, the programme is now being implemented in both urban
and rural areas. Some 115,000 persons will benefit from 164 rural water
projects under implementation in remote parts of the three governorates. As at
31 July 1998, phase I inputs had benefited over 300,000 persons. The United
Nations Centre for Human Settlements (Habitat) has been responsible for
provision of services to resettlement projects under phases I to III. Under the
enhanced distribution plan, the Centre has been allocated resources, subject to
eventual funding, to concentrate more work on urban or semi-urban schemes. As
at July 1998, all phase I and II projects were either under construction or
completed, comprising 42 rural or semi-urban water schemes and 22 sanitation
projects. Under phase III, the Centre has begun three water projects and one
sanitation assistance project to internally displaced persons. Despite the
strong preference of local authorities in the three governorates for major urban
rehabilitation projects, resources are inadequate for such a task. Urban water
and sanitation systems are badly decayed, with water loss at 40 per cent,
compounded by household wastage, and partial solutions to major infrastructure
problems may exacerbate the overall deterioration of the system. The Centre has
drawn up a priority list for deep well drilling for new water sources. In close
consultation with local authorities, it is seeking to identify alternative areas
for investing such resources and intends to complete project design by
December 1998.
Agriculture
39. As at 31 July 1998, agriculture inputs valued at $39,419,968, had arrived
in the three governorates, of which $24,344,833 (including cash component), or
34 per cent of allocations under phases I to III, have been delivered to end-users (see annex VI.G for further details). In the agricultural sector, the
application approval process under phases II and III was faster than in phase I
and has helped to improve the timeliness of deliveries. Essential inputs for
both the 1997-1998 winter and 1998 summer agricultural season were provided as
planned. Improved planning has enabled FAO to phase deliveries of inputs
according to seasonal requirements. FAO stated that, on average, its tendering
process has taken one to two weeks, and its contracting process about one week.
FAO includes and enforces a penalty clause in its contracts that the supplier
must deliver the product within a specified time-frame. This obviously varies
with the commodity. A limited number of commodities, including
antiparasiticides, tomato seeds and orchard fungicides, have not been supplied
in accordance with specifications, but FAO has taken remedial action.
40. The distribution mechanism is effective overall but it is hindered by
security risks in certain areas, seasonal shortage of storage space in
distribution centres and difficult access to remote areas. Some 155,907 farmers
have benefited from seed and fertilizer inputs. The area in production has
risen by 29 per cent over the 1996-1997 crop season, with a 20 per cent fall in
production costs. The summer pest control campaigns benefited 140,000 farmers,
and an estimated 85 per cent of animals in the region have been treated and
vaccinated. These activities have reduced disease incidence, increased
production levels and led to a 40 per cent drop in the prices of meat and dairy
products. The cost of veterinary pharmaceuticals in the local market has
dropped by over 50 per cent, and time-expired items have disappeared from sales
outlets. The number of broiler chicken farms increased from 25 to 150 between
February and July 1998, with the utilization of nearly all phase I and II
poultry inputs. Under phase III and the enhanced distribution plan, the target
is to reach a level of 300 reactivated farms. Backyard poultry-raising is being
promoted in order to increase availability of animal protein to poorer families
in remote areas. For inputs which are insufficient to meet the needs of
farmers, such as agricultural machinery spare parts, irrigation pumps and pipes,
wheat seed, fertilizers and sprayers, distribution to end-users is carried out
by lottery. Animal health vaccines and drugs, vegetable seeds and crop pest and
disease control inputs almost cover the total requirements of end-users. Some
inputs are sold to farmers at not more than 20 per cent of the market price. A
sliding scale is used to ensure that poorer farmers are not disadvantaged.
Electricity
41. As at 31 July 1998, electricity equipment, valued at $4,700,000, had
arrived in the three governorates, of which $1,613,014 (including cash
component), or 2 per cent of allocations under phases I to III, has been
delivered to end-users (see annex VI.F for further details). Implementation in
the electricity sector has evolved from a procurement exercise on behalf of the
local authorities into a major engineering programme. The pace of the
implementation of the programme has suffered seriously due to inadequate
technical and managerial resources as well as essential administrative support.
The implementation of the programme has also suffered owing to difficulties in
obtaining accurate specifications and technical documentation, whether from
local authorities or the Ministry of Industry, and to the fact that the full
range of equipment requirements were not fully identified. It has also been
difficult to secure the services of international suppliers willing to undertake
the execution of projects.
42. In the course of implementation, UNDP/Department of Economic and Social
Affairs has had to provide international technical expertise to compensate for
the fact that the local authorities do not possess the full range of expertise
to survey, design, plan or implement the projects they intend to undertake.
Moreover, UNDP/DESA notes that, for more than 50 per cent of items, quantities
and specifications have been changed by local authorities since the start of the
programme. This has inevitably caused major delays. UNDP/Department of
Economic and Social Affairs has experienced considerable difficulties both in
staffing its procurement and project management team at Headquarters and in
deploying to the field appropriately qualified international staff in a timely
manner. The utilization of inputs in Dahuk has been further constrained by
serious security matters. Not only are there an estimated 254 minefields
adjacent to power lines, but unknown saboteurs recently knocked down a
transmission tower and placed landmines around it, killing one of the locally
contracted engineering staff and wounding four others. In view of this
situation, there is a need to establish priority demining where the
rehabilitation activities are impeded by minefields.
43. Since July 1998, however, the following measures have been taken to speed
up implementation. UNDP/Department of Economic and Social Affairs is making
arrangements to delegate authority to the field to undertake equipment purchases
needed for timely response to urgent requirements. The Erbil office is now
headed by a very senior manager, with the authority to maintain project
integrity and to take procurement decisions. During the reporting period, four
international consultancy firms have undertaken studies on the structural
integrity of Derbandikhan dam, the rehabilitation of power generating units at
both Derbandikhan and Dokan dams, and the state of the transmission and
distribution network. Within the next three months, structural emergency
repairs of the Derbandikhan dam will be completed and two generating units at
Dokan will be overhauled. A substantial increase in equipment arrivals is also
expected over the same period, including 14 power transformers for Sulaymaniyah,
two mobile substations for Dahuk and Erbil, four diesel generating units for
Erbil emergency humanitarian services, 360 distribution transformers and a wide
variety of spares. At the most basic level, the programme is maintaining the
operational capacity of the electricity utilities. The programme in the three
northern governorates, including feasibility studies of alternative power
generation sources, cannot be separated from the rehabilitation of the national
grid. Until fundamental decisions are agreed to by all parties involved,
implementation will necessarily concentrate on the most viable and urgent
projects to prevent further degradation of power-generating capacity. Programme
implementation is now under constant review at the Headquarters level jointly by
the Office of the Iraq Programme, UNDP and the Department of Economic and Social
Affairs in order to ensure that the work plan is implemented on schedule.
Education
44. As at 31 July 1998, education supplies, valued at $12,107,542, had arrived
in the three governorates, of which $9,576,658 (including cash component), or
20 per cent of allocations under phases I to III, have been delivered to end-users (see annex VI.H for further details). UNICEF and UNESCO share
responsibility for the implementation of the education sector. UNICEF focuses
on primary schools and on the provision of school supplies and UNESCO
concentrates on secondary and tertiary education.
45. Serious problems have been encountered in the implementation of the UNESCO
programme. The implementation problems included serious staffing difficulties,
delays in submission of applications to the Security Council Committee,
inadequate delegation of contracting authority to the field and late payments to
local contractors. In addition, costs of materials were 60 to 70 per cent
higher in Sulaymaniyah than in Dahuk or Erbil, which led to unexpected
re-tendering, increased construction costs, and a corresponding 60 per cent cut
in envisaged rehabilitation activities in Sulaymaniyah.
46. During the reporting period, UNESCO has taken the necessary action to
streamline its procurement procedures by granting its Baghdad office sufficient
authority to manage the process effectively, facilitating transit of goods
through Jordan and ensuring that greater attention is paid to the quality of
incoming materials and evaluation of completed projects. By increasing the work
contracted locally to 60 to 70 per cent of the total, UNESCO expects to avoid
the delays encountered in importing goods under phase I. UNESCO has been
filling vacant posts with experienced international staff in the north, and is
in the process of strengthening its support from headquarters. These measures
have led to a marked acceleration of the education programme in recent months.
47. UNICEF has also experienced a range of difficulties in trans-shipment
through Turkey and has appointed a full-time logistics officer to follow up
customs clearance procedures. It has streamlined its local contracts approval
procedures with improved coordination between its Baghdad and Erbil offices.
Administrative improvements for international procurement may save up to seven
weeks in placing orders with suppliers.
48. All phase I UNESCO projects, except school chalk production, are due to be
completed by November 1998. Implementation of projects from phases II and III
will start by 15 September 1998, and enhanced distribution plan projects are
expected to begin in October 1998.
49. The United Nations Centre for Human Settlements (Habitat) has also been
heavily involved in the construction of new rural primary and urban secondary
schools under the settlement rehabilitation sector. Of its target of
180 schools under phases I to III, 20 have been completed and 76 are under
construction, of which 33 will be completed by the new school year.
Identification of the enhanced distribution plan projects has already started
and construction will start in March 1999. UNICEF's phase I and II
rehabilitation projects are under way at 137 schools and will be completed by
October 1998. The installation of printing press equipment for the production
of 4.5 million textbooks for 500,000 students is due to be completed by
October 1998. All phase II education kits for primary and intermediate school
pupils have arrived and will be distributed to some 500,000 pupils at the
beginning of the school year in October 1998.
Rehabilitation of settlements
50. As at 31 July 1998, in the settlement rehabilitation sector, commodities
valued at $5,788,626 (including cash component), or 20 per cent of allocations
under phases I to III, have been delivered to end-users (see annex VI.I for
further details). The settlement rehabilitation sector implemented by the
United Nations Centre for Human Settlements (Habitat) has made substantial
progress in spite of considerable administrative and operational constraints.
The total $84 million allocation under phases I to III and the enhanced
distribution plan is to facilitate permanent resettlement of those residents of
collective towns who wish to return to their places of origin, or to resettle
more recent internally displaced persons in new locations. Under phases I to
III, this will involve construction of some 180 schools with teachers' houses,
60 health centres, 32 sewerage projects, 72 access roads, 100 water schemes,
14 veterinary clinics, nearly 3,500 homes and the provision of other basic
infrastructure and community services. This requires appropriate administrative
and procurement infrastructure in the Centre, and an effective local
construction industry with the capacity to undertake work on this scale.
Neither were in place to ensure timely implementation. Over-centralized
tendering and procurement procedures used by the Centre and the United Nations
Office at Nairobi lengthened the time taken to place a contract to 16 weeks.
Local contractors, with no opportunity to engage in projects on this scale over
the past seven years, faced major set-up difficulties, compounded by exchange-rate fluctuations.
51. Despite these constraints, however, the Centre is ahead of its target
completion date in all three stages of prioritization and design, contracting
and construction. By the end of 1998, some $10 to $12 million worth of projects
will have been completed. This has had a major impact in boosting the capacity
of local contractors, which will benefit future construction projects undertaken
by United Nations agencies. The approach for settlement rehabilitation is the
establishment of basic, integrated infrastructure such as access roads, water
and sanitation, irrigation channels, schools and health centres.
Demining
52. As at 31 July 1998, activities valued at $4,219,370 (including cash
component), or 68 per cent of allocations under phases I to III, have been
implemented (see annex VI.J for further details). In the demining sector,
substantial progress has been made following the programme's initial
difficulties in phases I and II. The number of minefields in the governorates
of Dahuk, Erbil and Sulaymaniyah is not yet established, but is estimated to be
in the order of 4,000, of which only 2,500 have been demarcated. A database
survey carried out by the United Nations Office of Project Services (UNOPS) to
determine more accurately the number of mines and mine victims is due to be
completed by the end of January 1999. The number of demining teams is being
expanded in proportion to the estimated scale of the problem in each
governorate. The United Nations will formally notify the relevant authorities
in Iraq of the areas where it is conducting demining activities. The Government
of Iraq has not provided maps of minefields, and its procedures for clearing
equipment, including even ambulances, and issuing visas for international staff
have been lengthy. The Government of Turkey does not allow any transit of
demining equipment. To avoid delays, therefore, UNOPS has changed the type of
equipment which it intends to procure under the enhanced distribution plan, and
has deployed a full-time liaison officer to facilitate customs clearance in
Baghdad.
53. Although many villages employ their own untrained deminers, local
information on the extent of minefields is not reliable. UNOPS is conducting
its own accident survey; the first survey team of national staff has been
trained. UNOPS has restarted prosthetic centres in Diana and Halabja using
existing stocks and will shortly open a centre in Dahuk. It is estimated that
4,000 people already have prostheses, all of which will require maintenance, and
2,500 people in the region are currently awaiting artificial limbs. With
current capacity, it may take two years to clear the backlog; a more accurate
estimate will emerge through the survey. In addition, UNICEF is working to
provide a mine-awareness programme in schools, focusing on 1,000 schools located
in high-risk areas; 1,050 primary school teachers have been trained to date.
Although the UNOPS demining programme will be the largest in the three
governorates, in the short term, the sheer scale of the problem means that the
reduction of casualties will be achieved through greater awareness rather than
minefield clearance. However, it should also be recognized that the UNOPS
programme is building a regional capacity intended to be sustainable with
minimal outside support.
54. In spite of the increase in the quantity of oil exported from Iraq during
the reporting period, the substantial drop in the price of oil has led to a
decline in the total revenue projected for the current phase, which is now
estimated at $2.86 billion. After deductions pursuant to paragraph 8 of Council
resolution 986 (1995), a net amount of approximately $1.79 billion is expected
to be available for the humanitarian supplies authorized by resolution
1153 (1998), and the oil spare parts and equipment authorized by resolution
1175 (1998). This falls far short of the funds required to implement fully the
enhanced distribution plan ($3.1 billion). Accordingly, it is essential to
prioritize further within and among the different sectors in the enhanced
distribution plan, in order to ensure the appropriate utilization of the reduced
revenues available for the reasons stated above. The Office of the Iraq
Programme has entered into discussions with the Government of Iraq to create a
mechanism that will establish priorities to match available funding against
approved applications.
55. In order to expedite the reimbursements from the ESC (13 per cent) account
to the ESB (53 per cent) account for expenditures involved for bulk purchases of
food and medicine by the Government of Iraq for the governorates of Dahuk, Erbil
and Sulaymaniyah, measures have been taken by the United Nations to expedite
reporting of the arrival and authentication of food and medicine in the north.
Regrettably this has been insufficient to reduce the number of food and medicine
contracts under the ESB (53 per cent) account awaiting funding from the
reimbursed monies from the ESC (13 per cent) account, which now amount to
$161.4 million. Accordingly, the Executive Director of the Iraq Programme and
the United Nations Controller are reviewing further options to make the
necessary adjustments to the current procedures to reduce the long delays in the
reimbursements.
56. In order to accelerate the pace of implementation of the humanitarian
programme, the Executive Director of the Iraq Programme organized and chaired
inter-agency meetings in Baghdad and Erbil in June 1998, with the participation
of all the agencies and programmes concerned, including representatives from
their respective headquarters. I am satisfied that the decisions taken at the
inter-agency meetings will ensure more effective and speedy implementation of
the humanitarian programme, and further strengthen the overall cooperation and
interaction between the organizations of the United Nations system involved in
the implementation of the programme, both at the headquarters level and in the
field. Some of the positive results are already reflected in the present
report, in particular those regarding the concrete decisions taken to speed up
the implementation of the projects in the electricity and education sectors. An
urgent effort is also being made by all organizations concerned to fill the
long-standing vacancies in the field. In this context, I urge the Government of
Iraq to grant expeditiously entry visas to international staff, pursuant to the
relevant provisions of Council resolution 986 (1995) and the memorandum of
understanding.
57. I take this opportunity to express my appreciation for the dedication and
commitment of all the staff members of the United Nations system involved in the
implementation of the programme. I also wish to express my appreciation to the
Government of Iraq for its continued cooperation.
The allocation of total oil proceeds received from inception to date and
the corresponding expenditures is as follows:
(a) $3,363.2 million has been allocated for the purchase of humanitarian
supplies by the Government of Iraq, as specified in paragraph 8 (a) of
resolution 986 (1995). Letters of credit issued by the Banque Nationale de
Paris on behalf of the United Nations for the payment of those supplies for the
whole of Iraq amounted to $2,396.2 million under Phases I, II and III which
include an amount of $153.2 million due for the reimbursement for bulk purchases
made by the Government of Iraq for northern Iraq and distributed by the United
Nations Inter-Agency Humanitarian Programme;
(b) $824.4 million has been allocated for the purchase of humanitarian
goods to be distributed in the three northern governorates by the United Nations
Inter-Agency Humanitarian Programme, as specified in paragraph 8 (b) of the
resolution. Expenditures recorded for humanitarian goods approved by the
Security Council Committee amounted to $646.6 million;
(c) $2,021.8 million has been transferred directly into the United Nations
Compensation Fund, as specified in paragraph 8 (c) of the resolution. As at
31 July 1998, a total of 67.8 million had been allotted to cover the operating
expenditures of the Compensation Commission and an amount of $1,210.8 million
for payment of first, second and third installments of "A" and "C" claims;
(d) $140.5 million has been allocated for the operational and
administrative expenses of the United Nations associated with the implementation
of resolution 986 (1995), as specified in paragraph 8 (d) of the resolution.
Expenditures for administrative costs for all United Nations entities involved
in implementing the resolution amounted to $98.1 million;
(e) $47.6 million has been allocated to the United Nations Special
Commission (UNSCOM) for its operating expenses, as specified in paragraph 8 (e)
of the resolution. Expenditures for the Commission amounted to $37.9 million;
(f) $287.6 million has been set aside for the transportation costs of
petroleum and petroleum products originating in Iraq exported via the
Kirkuk-Yumurtalik pipeline through Turkey, in accordance with paragraph 8 (f) of
the resolution and in line with procedures adopted by the Security Council
Committee. Of that amount, $241.4 million has been paid to the Government of
Turkey;
(g) $63.4 million has been transferred directly to the escrow account
established pursuant to resolution 706 (1991) of 15 August 1991 and 712 (1991)
of 19 September 1991 for the repayments envisaged under paragraph 6 of
resolution 778 (1992) of 2 October 1992, as specified in paragraph 8 (g) of
resolution 986 (1995).
Phase | Last deposit | No. of letters of credit | Value of letters of credit from oil sales |
I | 27 June 1998 | 125 | $ 2 149 506 395.99 |
II | 2 January 1998 | 128 | $ 2 124 569 788.26 |
III | 30 June 1998 | 186 | $ 2 085 326 345.25 |
Current | As at 31/07/1998 | 113 | $ 1 327 291 000.001 |
Totals | 552 | $ 7 686 693 529.50 |
Phase | No. of letters of credit opened | Approximate value of letters of credit opened | Bank payments made on delivery |
I | 869 | 1 242 181 000 | $ 1 171 136 900 |
II | 524 | 1 185 287 000 | $ 907 554 200 |
III | 496 | 1 010 976 000 | $ 317 549 100 |
Current | 12 | 22 130 000 | $ - |
Totals | 1 901 | 3 460 574 000 | $ 2 396 240 200 |
1 Of the oil proceeds of $1,327,291,000, only $388.9 million had been
received as at 31 July 1998; oil proceeds to be received may vary due to market
price fluctuations.