08-F-0984 E4

E4 ACTION NEA-00 INFO LOG-00 MFA-00 NP-00 AID-00 COME-00 INL-00 DOEE-00 SRPP-00 EUR-00 E-00 FBIE-00 UTED-00 INR-00 I0-00 L-00 VCE-00 OES-00 OMB-00 EPAU-00 PA-00 PRS-00 ACE-00 P-00 SCT-00 SS0-00 SS-00 STR-00 TEST-00 EPAE-00 PMB- 00 DSCC-00 PRM-00 SWCI-00 /001W ------------------FC7FE1 AMAD-00 CA-00 DS-00 EB-00 VC-00 H-00 AC-00 DCP-01 TFBI-00 PER-00 D-00 SP-00 TRSE-00 USIE-00 DRL-00 G-OO CIAE-00 EXME-00 TEDE-00 NSAE-00 PM-00 IRM-00 R-OO SAS-00 152011Z /38 R 151958Z MAR 04 FM CPA BAGHDAD TO SECDEF WASHDC 0171 SECSTATE WASHDC 0179 WHITE HOUSE NSC WASHDC 0164 CJCS WASHDC CDR USCENTCOM MACDILL AFB FL DEPT OF AGRICULTURE WASHDC 0006 UNCLAS SECTION 01 OF 04 BAGHDAD 000089 DEPARTMENT PASS TO IRAQ COLLECTIVE E.O. 12958: N/A TAGS: EAID, ETRD, EAGR, PGOV, IZ SUBJECT: CABLE 751: FOOD SECURITY - BUILDING A THREE MONTH BUFFER REF: A) ROME 973, B) BAGHDAD 45 (NOTAL) 1. SUMMARY: WE ANTICIPATE NO DISRUPTIONS IN THE FOOD PIPELINE AND ARE ON TRACK TO HAVE A THREE-MONTH BUFFER RESERVE IN PLACE BY JULY 1. EXISTING OIL FOR FOOD CONTRACTS WILL SUPPLY PIPELINE NEEDS INTO MAY. WFP PROCUREMENT WILL ADDRESS IRAQI REQUIREMENTS THROUGH SEPTEMBER. LARGE-SCALE NEW PROCUREMENT BY THE MINISTRY OF TRADE BEGINNING NOW WILL BUILD AND MAINTAIN A THREE - MONTH BUFFER THROUGH THE END OF THE CALENDAR YEAR. CPA IS UNDERTAKING IMMEDIATE ENHANCEMENTS AT THE PORT IN UMM QASR THAT SHOULD INCREASE GRAIN OFF-LOAD CAPACITY BY MORE THAN 50 PERCENT WITH A TARGET DATE OF EARLY APRIL. WHILE LOCAL SHORTAGES OF SOME COMMODITIES HAVE OCCURRED BECAUSE OF LOW FOOD RESERVES AND TRANSPORT ISSUES, CPA IS ADDRESSING AND FACILITATING IMMEDIATE SOLUTIONS, INCLUDING EMERGENCY PROCUREMENT, SHUNTING FOOD BETWEEN GOVERNORATES, AND COORDINATING SECURITY FOR FOOD CONVOYS. WE ARE WORKING WITH IRAQIS TO ENSURE ACCOUNTABILITY AND UPGRADE TECHNOLOGY OVER THE NEXT SEVERAL MONTHS 1 AS WELL AS OPENING DISCUSSIONS ON HOW TO REDUCE DEPENDENCE ON THE FOOD BASKET IN THE MEDIUM TERM. BARRING AN UNFORESEEN CRISIS 1 WE ANTICIPATE CONTINUED CAPACITY-BUILDING THAT WILL LEAVE BEHIND NOT ONLY FOOD RESERVES ON JULY 1 1 BUT IRAQIS CAPABLE OF MANAGING THE FOOD PIPELINE . END SUMMARY . OIL FOR FOOD CONTRACTS 2. COMMODITIES PURCHASED UNDER THE OIL FOR FOOD (OFF) PROGRAM ARE BEING DELIVERED NOW AND ADDRESS IRAQ ' S FOOD NEEDS INTO MAY . THE OFF COORDINATION CENTER HAS CONTACTED SUPPLIERS TO VERIFY DELIVERY DATES AND IS TRACKING SHIPMENTS . FULL RESPONSIBILITY FOR THESE CONTRACTS WILL REMAIN WITH THE COORDINATION CENTER AND PIPELINE AND DELIVERY ISSUES ARE BEING MONITORED BY CPA'S FOOD SECURITY TEAM. THE FOLLOWING COMMODITIES ARE IN THE PIPELINE : FOREIGN WHEAT 870 1 000 MT RICE 415 1 000 MT GHEE/ OIL 170 1 000 MT SUGAR 277 1 000 MT TEA 22 I 000 MT MILK 50 1 000 MT SALT 17 1 000 MT INFANT FORMULA 11 1 000 MT WEANING CEREAL 3 I 000 MT SOAP 42 1 00 0 MT DETERGENT 50 , 000 MT WORLD FOOD PROGRAM 3. THE MARCH 3 - 4 VISIT TO BAGHDAD OF WORLD FOOD PROGRAM (WFP) COUNTRY DIRECTOR TORBEN DUE (REFTEL B) ADDRESSED KEY ISSUES REGARDING THE IMPLEMENTATION OF THE MEMORANDUM OF UNDERSTANDING TO PROCURE AND DELIVER COMMODITIES TO IRAQ ' S FOOD RATION SYSTEM. TO DATE : --ALL USD 910 MILLIO N HAS BEEN TRANSFERRED TO WFP ; --SPECIFICATIONS FO R ALL COMMODITIES HAVE BEEN AGREED ; --WFP HAS AGREED TO COMPLETE PROCUREMENT OF 1.6 MILLION METRIC TONS OF FOOD BY APRIL 1 ; --WFP WILL TAKE RESPONSIBILITY FOR DELIVERY TO ALL GOVERNO RATES 1 AS REQUESTED BY THE MINISTRY OF TRADE ; --CPA, THE IRAQI MINISTRY OF TRADE AND WFP (CPA- MOT-WFP) WILL MEET AGAIN IN EARLY APRIL TO ENSURE PIPELINE ISSUES ARE ADDRESSED ; AND --WFP WILL SHARE ITS COMMODITY TRACKING DATABASE WITH THE MOT TO ENSURE ACCURATE DELIVERY INFORMATION , POST-JULY 1 . 4 . BY THIS WEEK , WFP WILL HAVE RELEASED TENDERS FOR THE COMMODITIES AND AMOUNTS LISTED BELOW: FOREIGN WHEAT 897,500 MT RICE 222,500 MT GHEE/OIL 121,500 MT SUGAR 201,700 MT TEA 24,000 MT MILK 58,600 MT SALT 19,670 MT INFANT FORMULA 4 , BOO MT NOTE: NOT PASSED TO ABOVE ADDRESSEE(S) BAGHDAD 00000089 001.2 OF 004 HREE-MONTH BUFFER RESERVE IN PLACE BY JULY 1. EXISTING OIL FOR FOOD CONTRACTS WILL SUPPLY PIPELINE NEEDS INTO MAY. WFP PROCUREMENT WILL ADDRESS IRAQI REQUIREMENTS THROUGH SEPTEMBER. LARGE-SCALE NEW PROCUREMENT BY THE MINISTRY OF TRADE BEGINNING NOW WILL BUILD AND MAINTAIN A THREE-MONTH BUFFER THROUGH THE END OF THE CALENDAR YEAR . CPA IS UNDERTAKING IMMEDIATE ENHANCEMENTS AT THE PORT IN UMM QASR THAT SHOULD INCREASE GRAIN OFF-LOAD CAPACITY BY MORE THAN 50 PERCENT WITH A TARGET DATE OF EARLY APRIL. WHILE LOCAL SHORTAGES OF SOME COMMODITIES HAVE OCCURRED BECAUSE OF LOW FOOD RESERVES AND TRANSPORT ISSUES, CPA IS ADDRESSING AND FACILITATING IMMEDIATE SOLUTIONS, INCLUDING EMERGENCY PROCUREMENT, SHUNTING FOOD BETWEEN GOVERNORATES, AND COORDINATING SECURITY FOR FOOD CONVOYS. WE ARE WORKING WITH IRAQIS TO ENSURE ACCOUNTABILITY AND UPGRADE TECHNOLOGY OVER THE NEXT SEVERAL MONTHS , AS WELL AS OPENING DISCUSSIONS ON HOW TO REDUCE DEPENDENCE ON THE FOOD BASKET IN THE MEDIUM TERM. BARRING AN UNFORESEEN CRISIS , WE ANTICIPATE CONTINUED CAPACITY-BUILDING THAT WILL LEAVE BEHIND NOT ONLY FOOD RESERVES ON JULY 1 , BUT IRAQIS CAPABLE OF MANAGING THE FOOD PIPELINE. END SUMMARY . OIL FOR FOOD CONTRACTS 2 . COMMODITIES PURCHASED UNDER THE OIL FOR FOOD (OFF) PROGRAM ARE BEING DELI VERED NOW AND ADDRESS IRAQ' S FOOD NEEDS INTO MAY . THE OFF COORDINATION CENTER HAS CONTACTED SUPPLIERS TO VERIFY DELIVERY DATES AND IS TRACKING SHIPMENTS . FULL RESPONSIBILITY FOR THESE CONTRACTS WILL REMAIN WITH THE COORDINATION CENTER AND PIPELINE AND DELIVERY ISSUES ARE BEING M O NITORED BY CPA ' S FOOD SECURITY TEAM. THE FOLLOWING COMMODITIES ARE IN THE PIPELINE: FOREIGN WHEAT 870 ,000 MT RICE 415 , 000 MT GHEE/OIL 170,000 MT SUGAR 277,000 MT TEA 22,000 MT MILK 50,000 MT SALT 17,000 MT INFANT FORMULA 11 ,000 MT WEANING CEREAL 3 I 0 0 0 MT SOAP 42 , 000 MT DETERGENT 50 , 000 MT WORLD FOOD PROGRAM 3 . THE MARCH 3-4 VISIT TO BAGHDAD OF WORLD FOOD PROGRAM (WFP) COUNTRY DIRECTOR TORBEN DUE (REFTEL B) ADDRESSED KEY ISSUES REGARDING THE IMPLEMENTATION OF THE MEMORANDUM OF UNDERSTANDING TO PROCURE AND DELIVER COMMODITIES TO IRAQ ' S FOOD RATION SYSTEM. TO DATE : --ALL USD 910 MILLION HAS BEEN TRANSFERRED TO WFP ; --SPECIFICATIONS FOR ALL COMMODITIES HAVE BEEN AGREED ; --WFP HAS AGREED TO COMPLETE PROCUREMENT OF 1 . 6 MILLION METRIC TONS OF FOOD BY APRIL 1 ; --WFP WILL TAKE RESPONSIBILITY FOR DELIVERY TO ALL GOVERNORATES, AS REQUESTED BY THE MINISTRY OF TRADE ; --CPA , THE IRAQI MINISTRY OF TRADE AND WFP (CPA-MOT- WFP) WILL MEET AGAIN IN EARLY APRIL TO ENSURE PIPELINE ISSUES ARE ADDRESSED; AND --WFP WILL SHARE ITS COMMODITY TRACKING DATABASE WITH THE MOT TO ENSURE ACCURATE DELIVERY INFORMATION , POST-JULY 1 . 4 . BY THIS WEEK , WFP WILL HAVE RELEASED TENDERS FOR THE COMMODITIES AND AMOUNTS LISTED BELOW: FOREIGN WHEAT 897 , 500 MT RICE 222 , 500 MT GHEE/ OIL 121 , 500 MT SUGAR 201 , 700 MT TEA 24 , 000 MT MILK 58 , 600 MT SALT 19 , 670 MT INFANT FORMULA 4 , 800 MT NOTE : NOT PASSED TO ABOVE ADDRESSEE(S) BAGHDAD 00000089 001.3 OF 004 HREE-MONTH BUFFER RESERVE IN PLACE BY JULY 1 . EXISTING OIL FOR FOOD CONTRACTS WILL SUPPLY PIPELINE NEEDS INTO MAY. WFP PROCUREMENT WILL ADDRESS IRAQI REQUIREMENTS THROUGH SEPTEMBER. LARGE-SCALE NEW PROCUREMENT BY THE MINISTRY OF TRADE BEGINNING NOW WILL BUILD AND MAINTAIN A THREE-MONTH BUFFER THROUGH THE END OF THE CALENDAR YEAR . CPA IS UNDERTAKING IMMEDIATE ENHANCEMENTS AT THE PORT IN UMM QASR THAT SHOULD INCREASE GRAIN OFF-LOAD CAPACITY BY MORE THAN 50 PERCENT WITH A TARGET DATE OF EARLY APRIL. WHILE LOCAL SHORTAGES OF SOME COMMODITIES HAVE · OCCURRBD BECAUSE OF LOW FOOD RESERVES AND TRANSPORT ISSUES , CPA IS ADDRESSING AND FACILITATING IMMEDIATE SOLUTIONS , INCLUDING EMERGENCY PROCUREMENT , SHUNTING FOOD BETWEEN GOVERNORATES , AND COORDINATING SECURITY FOR FOOD CONVOYS. WE ARE WORKING WITH IRAQIS TO ENSURE ACCOUNTABILITY AND UPGRADE TECHNOLOGY OVER THE NEXT SEVERAL MONTHS, AS WELL AS OPENING DISCUSSIONS ON HOW TO REDUCE DEPENDENCE ON THE FOOD BASKET IN THE MEDIUM TERM. BARRING AN UNFORESEEN CRISIS, WE ANTICIPATE CONTINUED CAPACITY-BUILDING THAT WILL LEAVE BEHIND NOT ONLY FOOD RESERVES ON JULY 1, BUT IRAQIS CAPABLE OF MANAGING THE FOOD PIPELINE. END SUMMARY . OIL FOR FOOD CONTRACTS 2. COMMODITIES PURCHASED UNDER THE OIL FOR FOOD (OFF) PROGRAM ARE BEING DELIVERED NOW AND ADDRESS IRAQ ' S FOO D NEEDS INTO MAY . THE OFF COORDINATION CENTER HAS CONTACTED SUPPLIERS TO VERIFY DELIVERY DATES AND IS TRACKING SHIPMENTS . FULL RESPONSIBILITY FOR THESE CONTRACTS WILL REMAIN WITH THE COORDINATION CENTER AND PIPELINE AND DELIVERY ISSUES ARE BEING MONITORED BY CPA'S FOOD SECURITY TEAM. THE FOLLOWING COMMODITIES ARE IN THE PIPELINE : FOREIGN WHEAT 870 , 000 MT RICE 415 ,000 MT GHEE/OIL 170 ,000 MT SUGAR 277,000 MT TEA 22,000 MT MILK 50 ,000 MT SALT 17,000 MT INFANT FORMULA 11 , 000 MT WEANING CEREAL 3 , 0 0 0 MT SOAP 42 ,000 MT DETERGENT 50,000 MT WORLD FOOD PROGRAM 3. THE MARCH 3-4 VISIT TO BAGHDAD OF WORLD FOOD PROGRAM (WFP) COUNTRY DIRECTOR TORBEN DUE (REFTEL B) ADDRESSED KEY ISSUES REGARDING THE IMPLEMENTATION OF THE MEMORANDUM OF UNDERSTANDING TO PROCURE AND DELIVER COMMODITIES TO IRAQ 'S FOOD RATION SYSTEM. TO DATE: ~-ALL USD 910 MILLION HAS BEEN TRANSFERRED TO WFP ; --SPECIFICATIONS FOR ALL COMMODITIES HAVE BEEN AGREED; --WFP HAS AGREED TO COMPLETE PROCUREMENT OF 1.6 MILLION METRIC TONS OF FOOD BY APRIL 1 ; --WFP WILL TAKE RESPONSIBILITY FOR DELIVERY TO ALL GOVERNORATES , AS REQUESTED BY THE MINISTRY OF TRADE; --CPA , THE IRAQI MINISTRY OF TRADE AND WFP (CPA-MOT-WFP) WILL MEET AGAIN IN EARLY APRIL TO ENSURE PIPELINE ISSUES ARE ADDRESSED ; AND --WFP WILL SHARE ITS COMMODITY TRACKING DATABASE WITH THE MOT TO ENSURE ACCURATE DELIVERY INFORMATION , POST-JULY 1 . 4. BY THIS WEEK , WFP WILL HAVE RELEASED TENDERS FOR THE COMMODITIES AND AMOUNTS LISTED BELOW: FOREIGN WHEAT 897 , 500 MT RICE 222,500 MT GHEE /OIL 121,500 MT SUGAR 201,700 MT TEA 24,000 MT MILK 58,600 MT SALT 19 ,670 MT INFANT FORMULA 4 , 800 MT NOTE : NOT PASSED TO ABOVE ADDRESSEE(S) BAGHDAD 00000089 002 . 1 OF 004 INISTRY OF TRADE (MOT) IS UNDERTAKING A LARGE-SCALE PROCUREMENT PROGRAM WHICH HAS BEEN COORDINATED WITH WFP TO BUILD THE FOOD BUFFER RESERVE . CPA ' S FOOD SECURITY TEAM AND CPA CONTRACTING HAVE WORKED INTENSIVELY WITH MOT OFFICIALS OVER THE PAST MONTH TO PUT IN PLACE A PROCUREMENT AND CONTRACTING SYSTEM THAT IS FAIR AND TRANSPARENT WITH SUPPLIER LISTS THAT ALLOW FOR ROLLING REGISTRATION AND OPEN COMPETITION. LETTERS OF CREDIT WILL BE ISSUED THROUGH THE TRADE BANK OF IRAQ. MOT HAS ISSUED ITS FIRST TENDERS FOR RICE AND MILK POWDER ; ADDITIONAL TENDERS WILL FOLLOW . WE ARE CONFIDENT THAT MOT HAS PROCESSES IN PLACE TO TAKE OVER FULL- SCALE PROCUREMENT FROM WFP ON APRIL 1 . 6. MOT WILL PROCURE COMMODITIES IN TWO TRANCHES DRAWING FROM ITS 2004 FOOD BUDGET OF APPROXIMATELY USD 3 . 5 BILLION . THE FIRST HAS BEGUN AND IS DESIGNED TO HAVE A THREE - MONTH RESERVE ·IN PLACE BY JULY 1 . THE SECOND WILL ADDRESS FOOD NEEDS POST- TRANSITION AND ENSURE THAT THE 3-MONTH BUFFER WILL REMAIN IN PLACE THROUGH THE END OF THE CALENDAR YEAR. THE FIRST TRANCHE OF MOT PROCUREMENT INCLUDES : FOREIGN WHEAT 540 , 000 MT RICE 232,000 MT GHEE/OIL 146 , 000 MT SUGAR 156 , 000 MT TEA 16 , 000 MT MILK 40 1 000 MT SALT 11 1 000 MT INFANT FORMULA 6 1 000 MT SOAP 36 , 000 MT DETERGENT 47 1 000 MT LOCAL WHEAT 600 I 000 MT TOMATO PASTE 20 1 000 MT CHEESE 20 , 000 MT PORT CAPACITY ISSUES 7 . IRAQ ' S MAIN PORT AT UMM QASR WILL CONTINUE TO BE IRAQ ' S MOST IMPORTANT ENTRY POINT FOR COMMODITIES . OUR PRINCIPAL CONCERN IS TO ENHANCE THE PORT ' S CAPACITY TO HANDLE LARGE- SCALE GRAIN SHIPMENTS IN THE COMING MONTHS . THE GOAL IS TO '· INCREASE OFF-LOAD CAPACITY TO 12 , 000 MT BY EARLY APRIL WHICH REPRESENTS MORE THAN A 50 PERCENT INCREASE FROM CURRENT LEVELS . THE PLAN ALSO PROVIDES FOR OFF-LOADING FROM A SECOND BERTH , REDUCING CONGESTION AND PROVIDING INSURANCE AGAINST THE POSSIBILITY THAT THE MAIN BERTH IS NOT AVAILABLE. IRAQ 1 S CURRENT GRAIN NEED FOR THE FOOD BASKET IS 180 ,00 0 MT PER MONTH : --GRAIN FACILITIES ARE UNDER REPAIR AND OPERATING AT 4 , 500 MT PER DAY. WHEN REPAIRS ARE COMPLETED BY APRIL 1, CAPACITY WILL BE AT 7 , 000 MT PER DAY . --TO TAKE ADVANTAGE OF A BERTH IN THE OLD PORT , CPA RELEASED A REQUEST FOR PROPOSALS (RFPS) THE FIRST WEEK IN MARCH TO LEASE SIX PORTABLE GRAIN EVACUATORS. BIDS ARE CURRENTLY UNDER REVIEW WITH A REQUESTED DELIVERY TIME OF TWO WEEKS. THESE WOULD ADD ADDITIONAL CAPACITY OF 5,000 MT PER DAY. --MOT HAS BEGUN REPAIR OF FOUR EXISTING GRAIN EVACUATORS AT THE OLD PORT AND IS ARRANGING FOR LONG-TERM USE WITH THE MINISTRY OF TRANSPORTATION . THESE HAVE A CAPACITY OF 3 , 000 MT PER DAY. ~-FOR THE LONGER- TERM, CPA IS WORKING WITH MOT ON PROPOSALS · TO REPAIR SIX LARGE RONCUZZI EVACUATORS THAT WERE LOOTED. REPAIR TIME IS ESTIMATED AT MINIMUM TWO MONTHS AND USD ··, 700,000 TO ADD AN ADDITIONAL 10 , 000 MT PER DAY CAPACITY. WE ARE ALSO PREPARING A PROPOSAL FOR POSSIBLE WORLD BANK FUNDING FOR COMPREHENSIVE GRAIN SILO REPAIRS AT AN ESTIMATED COST OF USD 8 MILLION . 8. MOT CURRENTLY USES PORT FACILITIES AT AQABA , JORDAN , AND TARTOUS , SYRIA, BUT HIGHER COSTS AND INLAND TRANSPORT DELAYS MAKE THESE PORTS LESS DESIRABLE . THE MINISTRY IS EXAMINING OTHER OPTIONS, INCLUDING USE OF PORTS IN IRAN AND KUWAIT AND A NEW BORDER CROSSING POINT WITH SAUDI ARABIA. DREDGING OF THE UMM QASR PORT IS ALSO NEEDED TO ENSURE A 12.5 METER DRAFT FOR LARGER SHIPS. NOTE: NOT PASSED TO ABOVE ADDRESSEE(S) BAGHDAD 00000089 002.2 OF 004 INISTRY OF TRADE (MOT) IS UNDERTAKING A LARGE-SCALE PROCUREMENT PROGRAM WHICH HAS BEEN COORDINATED WITH WFP TO BUILD THE FOOD BUFFER RESERVE . CPA 1 S FOOD SECURITY TEAM AND CPA CONTRACTING HAVE WORKED I NTENSIVELY WITH MOT OFFICIALS OVER THE PAST MONTH TO PUT IN PLACE A PROCUREMENT AND CONTRACTING SYSTEM THAT IS FAIR AND TRANSPARENT WITH SUPPLIER LISTS THAT ALLOW FOR ROLLING REGISTRATION AND OPEN COMPETITION. LETTERS OF CREDIT WILL BE ISSUED THROUGH THE TRADE BANK OF IRAQ . MOT HAS ISSUED ITS FIRST TENDERS FOR RICE AND MILK POWDER ; ADDITIONAL TENDERS WILL FOLLOW. WE ARE CONFIDENT THAT MOT HAS PROCESSES IN PLACE TO TAKE OVER FULL-SCALE PROCUREMENT FROM WFP ON APRIL 1 . 6. MOT WILL PROCURE COMMODITIES IN TWO TRANCHES DRAWING FROM ITS 2004 FOOD BUDGET OF APPROXIMATELY USD 3.5 BILLION. THE FIRST HAS BEGUN AND IS DESIGNED TO HAVE A THREE-MONTH RESERVE IN PLACE BY JULY 1. THE SECOND WILL ADDRESS FOOD NEEDS POST-TRANSITION AND ENSURE THAT THE 3-MONTH BUFFER WILL REMAIN IN PLACE THROUGH THE END OF THE CALENDAR YEAR . THE FIRST TRANCHE OF MOT PROCUREMENT INCLUDES: FOREIGN WHEAT 540,000 MT RICE 232,000 MT GHEE/OIL 146,000 MT SUGAR 156,000 MT TEA 16 , 000 MT MILK 40,000 MT SALT 11,000 MT INFANT FORMULA 6 I 000 MT SOAP 36 ,000 MT DETERGENT 47 ,000 MT LOCAL WHEAT 600 I 000 MT TOMATO PASTE 20,000 MT CHEESE 20 , 000 MT PORT CAPACITY ISSUES .·. ~· 7. IRAQ ' S MAIN PORT AT UMM QASR WILL CONTINUE TO BE IRAQ ' S MOST IMPORTANT ENTRY POINT FOR COMMODITIES. OUR PRINCIPAL CONCERN IS TO ENHANCE THE PORT'S CAPACITY TO HANDLE LARGE- SCALE GRAIN SHIPMENTS IN THE COMING MONTHS. THE GOAL IS TO INCREASE OFF-LOAD CAPACITY TO 12,000 MT BY EARLY APRIL WHICH REPRESENTS MORE THAN A 50 PERCENT INCREASE FROM CURRENT LEVELS . THE PLAN ALSO PROVIDES FOR OFF- LOADING ' . FROM A SECOND BERTH , REDUCING CONGESTION AND PROVIDING INSURANCE AGAINST THE POSSIBILITY THAT THE MAIN BERTH IS NOT AVAILABLE . IRAQ ' S CURRENT GRAIN NEED FOR THE FOOD BASKET IS 180 ,000 MT PER MONTH : --GRAIN FACILITIES ARE UNDER REPAIR AND OPERATING AT 4 , 500 MT PER DAY. WHEN REPAIRS ARE COMPLETED BY APRIL 1, CAPACITY WILL BE AT 7 , 000 MT PER DAY . --TO TAKE ADVANTAGE OF A BERTH IN THE OLD PORT , CPA RELEASED A REQUEST FOR PROPOSALS (RFPS) THE FIRST WEEK IN MARCH TO LEASE SIX PORTABLE GRAIN EVACUATORS . BIDS ARE CURRENTLY UNDER REVIEW WITH A REQUESTED DELIVERY TIME OF TWO WEEKS. THESE WOULD ADD ADDITIONAL CAPACITY OF 5 , 000 MT PER DAY . --MOT HAS BEGUN REPAIR OF FOUR EXISTING GRAIN EVACUATORS AT THE OLD PORT AND IS ARRANGING FOR LONG-TERM USE WITH THE MINISTRY OF TRANSPORTATION. THESE HAVE A CAPACITY OF 3 , 000 MT PER DAY . --FOR THE LONGER-TERM, CPA IS WORKING WITH MOT ON PROPOSALS TO REPAIR SIX LARGE RONCUZZI EVACUATORS THAT WERE LOOTED . REPAIR TIME IS ESTIMATED AT MINIMUM TWO MONTHS AND USD 700,000 TO ADD AN ADDITIONAL 10,000 MT PER DAY CAPACITY. WE ARE ALSO PREPARING A PROPOSAL FOR POSSIBLE WORLD BANK FUNDING FOR COMPREHENSIVE GRAIN SILO REPAIRS AT AN ESTIMATED COST OF USD 8 MILLION. 8. MOT CURRENTLY USES PORT FACILITIES AT AQABA, JORDAN, AND TARTOUS , SYRIA , BUT HIGHER COSTS AND INLAND TRANSPORT DELAYS MAKE THESE PORTS LESS DESIRABLE . THE MINISTRY IS EXAMcr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· . OUR PRINCIPAL CONCERN IS TO ENHANCE · THE PORT ' S CAPACITY TO HANDLE LARGE- SCALE GRAIN SHIPMENTS IN THE COMING MONTHS . THE GOAL IS TO INCREASE OFF-LOAD CAPACITY TO 12 , 000 MT BY EARLY APRIL WHICH REPRESENTS M ORE THAN A 50 PERCENT INCREASE FRO M CURRENT LEVELS . THE PLAN ALSO PROVIDES FOR OFF-LOADING FROM A SECOND BERTH , REDUCING CONGESTION AND PROVIDING INSURANCE AGAINST THE POSSIBILITY THAT THE MAIN BERTH IS NOT AVAILABLE . IRAQ ' S CURRENT GRAIN NEED FOR THE FOOD BASKET IS 180 , 0 00 MT PER MONTH : --GRAIN FACILITIES ARE UNDER REPAIR AND OPERATING AT 4 , 500 MT PER DAY. WHEN REPAIRS ARE COMPLETED BY APRIL 1 , CAPACITY WILL BE AT 7,000 MT PER DAY. --TO TAKE ADVANTAGE OF A BERTH IN THE OLD PORT , CPA RELEASED A REQUEST FOR PROPOSALS (RFPS) THE FIRST WEEK IN MARCH TO LEASE SIX PORTABLE GRAIN EVACUATORS . BI DS ARE CURRENTLY UNDER REVIEW WITH A REQUESTED DELIVERY TIME OF TWO WEEKS . THESE WOULD ADD ADDITIONAL CAPACITY OF 5 , 000 MT PER DAY . --MOT HAS BEGUN REPAIR OF FOUR EXISTING GRAIN EVACUATORS AT THE OLD PORT AND IS ARRANGING FOR LONG-TERM USE WITH THE MINISTRY OF TRANSPORTATION. THESE HAVE A CAPACITY OF 3 , 000 MT PER DAY . --FOR THE LONGER-TERM , CPA IS WO~ING WITH MOT ON PROPOSALS TO REPAIR SIX LARGE RONCUZZI EVACUATORS THAT WERE LOOTED . REPAIR TIME IS ESTIMATED AT MINIMUM TWO MONTHS AND USD 700 , 000 TO ADD AN ADDITIONAL 10,000 MT PER DAY CAPACITY. WE ARE ALSO PREPARING A PROPOSAL FOR POSSIBLE WORLD BANK FUNDING FOR COMPREHENSIVE GRAIN SILO REPAIRS AT AN ESTIMATED COST OF USD 8 MILLION. 8. MOT CURRENTLY USES PORT FACILITIES AT AQABA , JORDAN , AND TARTOUS , SYRIA, BUT HIGHER COSTS AND INLAND TRANSPORT DELAYS MAKE THESE PORTS LESS DESIRABLE . THE MINISTRY IS EXAMINING OTHER OPTIONS , INCLUDING USE OF PORTS IN IRAN AND KUWAIT AND A NEW BORDER CROSSING POINT WITH SAUDI ARABIA . DREDGING OF THE UMM QASR PORT IS ALSO NEEDED TO ENSURE A 12.5 METER DRAFT FOR LARGER SHIPS. NOTE: NOT PASSED TO ABOVE ADDRESSEE(S) BAGHDAD 00000089 003.1 OF 004 UREMENT AND DELAYS IN THE RELEASE OF WFP TENDERS IN EARLY 2004 CONTRIBUTED TO . DIMINISHING STOCKS OF FOOD BASKET COMMODITIES , AND EVEN SOME LOCALIZED SHORTAGES. CPA ADDRESSED GRAIN SHORTAGES WITH EMERGENCY PROCUREMENTS IN THE REGION. SHORTAGES IN RICE HAVE CREATED A DEFICIT IN THE FOOD RATION SYSTEM THAT WILL BE MADE UP IN THE FUTURE. OTHER LOCAL SHORTAGES OF RICE, SUGAR, ADULT MILK , DETERGENT , AND TEA HAVE ALSO OCCURRED, DUE PRIMARILY TO PROBLEMS WITH INLAND TRANSPORT. MOT IS SHUNTING FOOD BETWEEN GOVERNORATES TO ENSURE THAT GAPS ARE FILLED. •'\. . ' . ' · -. .. 10 . TRUCKING CAPACITY IS A CONCERN AS THE DEMANDS OF RECONSTRUCTION INCREASE. CONTRACTS ARE GENERALLY WRITTEN ON THE BASIS OF COST, INSURANCE, AND FREIGHT (CIF) TO ALL GOVERNORATES , WHICH MAKES SUPPLIERS RESPONSIBLE FOR DELIVERY. AS COMPETITION GROWS FOR TRUCKING SERVICES AND PRICES INCREASE , IT WILL BE NECESSARY TO ENSURE THAT FOOD DELIVERIES ARE GIVEN PRIORITY. MOT ' S OWN FLEET OF TRUCKS , WHICH HAD NUMBERED SOME 3,000 PRIOR TO THE WAR , HAS ERODED SIGNIFICANTLY AS TRUCKERS HAVE CHOSEN TO USE MOT VEHICLES FOR PRIVATE DELIVERIES . ACCOUNTABILITY AND INFORMATION TECHNOLOGY 11. MOT NEEDS TO UPDATE ITS ABILITY TO TRACK THE DELIVERY OF COMMODITIES AND MANAGE ITS INVENTORIES . WE ARE WORKING WITH MOT TO IMPROVE ITS CAPACITY TO COMMUNICATE WITHIN AND · .· . , .. ,.. AMONG GOVERNORATES , AS WELL AS BETWEEN GOVERNORATES AND BAGHDAD. WE ARE LOOKING AT A PHASED APPROACH THAT WILL IMPROVE DATA COLLECTION , ANALYSIS , AND REPORTING WITH SIMPLE TRAINING AND SOFTWARE IMPROVEMENTS OVER THE NEXT MONTHS , AS WELL AS CONSIDERING A MORE COMPREHENSIVE COMMODITY TRACKING AND INVENTORY MANAGEMENT SYSTEM FOR THE MEDIUM TERM. 12 . WE ALSO NEED TO ENSURE THAT REASONABLE INTERNAL CONTROLS ARE IN PLACE TO ENSURE ACCOUNTABILITY . CPA HAS TAKEN THE FOLLOWING STEPS: --AN AUDIT AND SYSTEMS REVIEW OF THE BAGHDAD OFF COORDINATION CENTER. AN RFP FOR THE EXTERNAL AUDIT WILL BE ISSUED SHORTLY. --ISSUANCE OF A "CODE OF CONDUCT" FOR OFF SUPPLIERS . --ENHANCEMENT OF THE COORDINATION CENTER ' S SECURITY CELL, INCLUDING SECURITY ESCORTS FOR TRUCK CONVOYS, RADIO TRACKING BEACONS FOR TRUCKS, LIAISON OFFICERS AT EACH MAJOR SUBORDINAT~ COMMAND, SURVEILLANCE, AND SPOT INSPECTIONS . --REFERRAL OF ANY INFORMATION ON FRAUD AND CORRUPTION TO THE MINISTRY OF JUSTICE AND THE CENTRAL CRIMINAL COURT OF IRAQ. --THIRD-PARTY AUTHENTICATION. THE MOT IS EXAMINING THE VIABILITY OF INDEPENDENT VERIFICATION AND AUTHENTICATION OF WAREHOUSES AND SILOS USING MINISTRY FUNDS AFTER JULY 1. --INSPECTOR GENERAL. AN MOT INSPECTOR GENERAL HAS BEEN SELECTED AND QUALIFICATIONS REVIEWED . FUTURE OF THE FOOD RATION SYSTEM 13. THE SADDAM-INTRODUCED PUBLIC DISTRIBUTION SYSTEM TO PURCHASE AND DISTRIBUTE FOOD RATIONS COSTS SOME $280 MILLION PER MONTH. SUCH LARGE-SCALE IMPORTS HAVE DISTORTED THE ECONOMY AND CREATED DEPENDENCY ON A SYSTEM THAT IS NOT SUSTAINABLE . WHILE THERE ARE NO CURRENT PLANS TO MONETIZE THE FOOD BASKET , CPA IS WORKING WITH MOT AND OTHERS ON OPTIONS TO PHASE OUT COMMODITIES GRADUALLY. MOT WILL DROP PULSES (E . G. PE. AS , BEANS) FROM THE FOOD BASKET IN JULY , AND WILL ALLOW A THREE- MONTH (JULY , AUGUST , SEPTEMBER) ADDITION TO THE BASKET OF TOMATO PASTE AND CANNED PROCESSED CHEESE. WE ARE EXAMINING OTHER OPTIONS TO REDUCE DEPENDENCY ON PUBLIC DISTRIBUTION SYSTEMS (PDS) . COMMENT 14 . WE ENVISION NO BREAKS IN THE PIPELINE OF ESSENTIAL COMMODITIES IN THE MONTHS AHEAD , BARRING ANY UNFO RESEEN NOTE : NOT PASSED TO ABOVE ADDRESSEE(S) BAGHDAD 00000089 003 . 2 OF 004 UREMENT AND DELAYS IN THE RELEASE OF WFP TENDERS IN EARLY 2004 CONTRIBUTED TO DIMINISHING STOCKS OF FOOD BASKET COMMODITIES , AND EVEN SOME LOCALIZED SHORTAGES . CPA ADDRESSED GRAIN SHORTAGES WITH EMERGENCY PROCUREMENTS IN THE REGION . SHORTAGES IN RICE HAVE CREATED A DEFICIT IN THE FOOD RATION SYSTEM THAT WILL BE MADE UP IN THE FUTURE. OTHER LOCAL SHORTAGES OF RICE, SUGAR, ADULT MILK , DETERGENT , AND TEA HAVE ALSO OCCURRED , DUE PRIMARILY TO PROBLEMS WITH INLAND TRANSPORT . MOT IS SHUNTING FOOD BETWEEN GOVERNORATES TO ENSURE THAT GAPS ARE FI LLED. 10 . TRUCKING CAPACITY IS A CONCERN AS THE DEMANDS OF RECONSTRUCTION INCREASE . CO NTRACTS ARE GENERALLY WRITTEN O N THE BASIS O F CO ST , INSURANCE , AND FREIGHT (CIF) TO ALL /. GOVERNORATES , WHICH MAKES SUPPLIERS RESPONSIBLE FO R DELIVERY . AS COMPETITIO N GROWS FOR TRUCKING SERVICES AND PRICES INCREASE , IT WILL BE NECESSARY TO ENSURE THAT FOOD DELIVERIES ARE GIVEN PRIORITY. MOT ' S OWN FLEET OF TRUCKS , WHICH HAD NUMBERED SOME 3 , 000 PRIOR TO THE WAR , HAS ERODED SIGNIFICANTLY AS TRUCKERS HAVE CHOSEN TO USE M OT VEHICLES FOR PRIVATE DELIVERIES . .... •. ACCOUNTABILITY AND INFORMATION TECHNOLOGY 11 . MOT NEEDS TO UPDATE ITS ABILITY TO TRACK THE DELIVERY OF COMMODITIES AND MANAGE ITS INVENTORIES . WE ARE WORKING WITH MOT TO IMPROVE ITS CAPACITY TO COMMUNICATE WITHIN AND AMONG GOVERNORATES , AS WELL AS BETWEEN GO VERNO RATES AND BAGHDAD . WE ARE LOO KING AT A PHASED APPRO ACH THAT WILL IMPROVE DATA COLLECTIO N, ANALYSIS , AND REPORTING WITH SIMPLE TRAINING AND SOFTWARE IMPROVEMENTS OVER THE NEXT MONTHS , AS WELL AS CO NSI DERING A MORE COMPREHENSIVE COMMODITY TRACKING AND INVENTORY MANAGEMENT SYSTEM FOR THE MEDIUM TERM. 12 . WE ALSO NEED TO ENSURE THAT REASONABLE INTERNAL CONTROLS ARE IN PLACE TO ENSURE ACCOUNTABILITY . CPA HAS TAKEN THE FOLLOWING STEPS: --AN AUDIT AND SYSTEMS REVIEW OF THE BAGHDAD OFF COORDINATION CENTER. AN RFP FOR THE EXTERNAL AUDIT WILL BE ISSUED SHORTLY . --ISSUANCE OF A "CODE OF CONDUCT" FOR OFF SUPPLIERS. --ENHANCEMENT OF THE COORDINATION CENTER ' S SECURITY CELL, INCLUDING SECURITY ESCORTS FOR TRUCK CONVOYS, RADIO TRACKING BEACONS FOR TRUCKS, LIAISON OFFICERS AT EACH MAJOR SUBORDINATE COMMAND, SURVEILLANCE, AND SPOT INSPECTIONS . --REFERRAL OF ANY INFORMATION ON FRAUD AND CORRUPTION TO THE MINISTRY OF JUSTICE AND THE CENTRAL CRIMINAL COURT OF IRAQ. --THIRD-PARTY AUTHENTICATION . THE MOT IS EXAMINING THE VIABILITY OF INDEPENDENT VERIFICATION AND AUTHENTICATION OF WAREHOUSES AND SILOS USING MINISTRY FUNDS AFTER JULY 1. --INSPECTOR GENERAL . AN MOT INSPECTOR GENERAL HAS BEEN SELECTED AND QUALIFICATIONS REVIEWED. FUTURE OF THE FOOD RATION SYSTEM 13 . THE SADDAM-INTRODUCED PUBLIC DISTRIBUTION SYSTEM TO PURCHASE AND DISTRIBUTE FOOD RATIONS COSTS SOME $280 MILLION PER MONTH. SUCH LARGE-SCALE IMPORTS HAVE DISTORTED THE ECONOMY AND CREATED DEPENDENCY ON A SYSTEM THAT IS NOT SUSTAINABLE. WHILE THERE ARE NO CURRENT PLANS TO MONETIZE THE FOOD BASKET , CPA IS WORKING WITH MOT AND OTHERS ON OPTIONS TO PHASE OUT COMMODITIES GRADUALLY. MOT WILL DROP PULSES (E.G. PEAS , BEANS) FROM THE FOOD BASKET IN JULY, AND WILL ALLOW A THREE-MONTH (JULY, AUGUST, SEPTEMBER) ADDITION TO THE BASKET OF TOMATO PASTE AND CANNED PROCESSED CHEESE. WE ARE EXAMINING OTHER OPTIONS TO REDUCE DEPENDENCY ON PUBLIC DISTRIBUTION SYSTEMS (PDS) . COMMENT 14. WE ENVISION NO BREAKS IN THE PIPELINE OF ESSENTIAL COMMODITIES IN THE MONTHS AHEAD , BARRING ANY UNFORESEEN NOTE: NOT PASSED TO ABOVE ADDRESSEE(S) BAGHDAD 00000089 003.3 OF 004 UREMENT AND DELAYS IN THE RELEASE OF WFP TENDERS IN EARLY 2004 CONTRIBUTED TO DIMINISHING STOCKS OF FOOD BASKET COMMODITIES , AND EVEN SOME LOCALIZED SHORTAGES . CPA ADDRESSED GRAIN SHORTAGES WITH EMERGENCY PROCUREMENTS IN THE REGION . SHORTAGES IN RICE HAVE CREATED A DEFICIT IN THE FOOD RATION SYSTEM THAT WILL BE MADE UP IN THE FUTURE . OTHER LOCAL SHORTAGES OF RICE , SUGAR, ADULT MILK, DETERGENT , AND TEA HAVE ALSO OCCURRED, DUE PRIMARILY TO PROBLEMS WITH INLAND TRANSPORT. MOT IS SHUNTING FOOD BETWEEN GOVERNORATES TO ENSURE THAT GAPS ARE FILLED. 10. TRUCKING CAPACITY IS A CONCERN AS THE DEMANDS OF RECONSTRUCTION INCREASE. CONTRACTS ARE GENERALLY WRITTEN ON THE BASIS OF COST, INSURANCE, AND FREIGHT (CIF) TO ALL GOVERNORATES, WHICH MAKES SUPPLIERS RESPONSIBLE FOR DELIVERY. AS COMPETITION GROWS FOR TRUCKING SERVICES AND PRICES INCREASE , IT WILL BE NECESSARY TO ENSURE THAT FOOD DELIVERIES ARE GIVEN PRIORITY. MOT ' S OWN FLEET OF TRUCKS , WHICH HAD NUMBERED SOME 3 , 000 PRIOR TO THE WAR , HAS ERODED SIGNIFICANTLY AS TRUCKERS HAVE CHOSEN TO USE MOT VEHICLES FOR PRIVATE DELIVERIES . ACCOUNTABILITY AND INFORMATION TECHNOLOGY 11. MOT NEEDS TO UPDATE ITS ABILITY TO TRACK THE DELIVERY OF COMMODITIES AND MANAGE ITS INVENTORIES. WE ARE WORKING WITH MOT TO IMPROVE ITS CAPACITY TO COMMUNICATE WITHIN AND AMONG GOVERNORATES , AS WELL AS BETWEEN GOVERNORATES AND BAGHDAD. WE ARE LOOKING AT A PHASED APPROACH THAT WILL IMPROVE DATA COLLECTION, ANALYSIS, AND REPORTING WITH SIMPLE TRAINING AND SOFTWARE IMPROVEMENTS OVER THE NEXT MONTHS , AS WELL AS CONSIDERING A MORE COMPREHENSIVE COMMODITY TRACKING AND INVENTORY MANAGEMENT SYSTEM FOR THE MEDIUM TERM. ·12 . WE ALSO NEED TO ENSURE THAT REASONABLE INTERNAL CONTROLS ARE IN PLACE TO ENSURE ACCOUNTABILITY. CPA HAS TAKEN THE .FOLLOWING STEPS: --AN AUDIT AND SYSTEMS REVIEW OF THE BAGHDAD OFF COORDINATION CENTER . AN RFP FOR THE EXTERNAL AUDIT WILL BE ISSUED SHORTLY. --ISSUANCE OF A "CODE OF CONDUCT" FOR OFF SUPPLIERS. --ENHANCEMENT OF THE COORDINATION CENTER ' S SECURITY CELL, INCLUDING SECURITY ESCORTS FOR TRUCK CONVOYS , RADIO TRACKING BEACONS FOR TRUCKS , LIAISON OFFICERS AT EACH MAJOR SUBORDINATE COMMAND , SURVEILLANCE , AND SPOT INSPECTIONS . --REFERRAL OF ANY INFORMATION ON FRAUD AND CORRUPTION TO THE MINISTRY OF JUSTICE AND THE CENTRAL CRIMINAL COURT OF IRAQ . - - THIRD-PARTY AUTHENTICATION . THE MOT IS EXAMINING THE VIABILITY OF INDEPENDENT VERIFICATION AND AUTHENTICATION OF WAREHOUSES AND SILOS USING MINISTRY FUNDS AFTER JULY 1. --INSPECTOR GENERAL . AN MOT INSPECTOR GENERAL HAS BEEN SELECTED AND QUALIFICATIONS REVIEWED. FUTURE OF THE FOOD RATION SYSTEM 13. THE SADDAM-INTRODUCED PUBLIC DISTRIBUTION SYSTEM TO PURCHASE AND DISTRIBUTE FOOD RATIONS COSTS SOME $280 MILLION PER MONTH . SUCH LARGE-SCALE IMPORTS HAVE DISTORTED THE ECONOMY AND CREATED DEPENDENCY ON A SYSTEM THAT IS NOT SUSTAINABLE. WHILE THERE ARE NO CURRENT PLANS TO MONETIZE THE FOOD BASKET , CPA IS WORKING WITH MOT AND OTHERS ON OPTIONS TO PHASE OUT COMMODITIES GRADUALLY . MOT WILL DROP PULSES (E . G. PEAS , BEANS) FROM THE FOOD BASKET IN JULY , AND · ."1' WILL ALLOW A THREE-MONTH (JULY , AUGUST, SEPTEMBER) ADDITION TO THE BASKET OF TOMATO PASTE AND CANNED PROCESSED CHEESE. WE ARE EXAMINING OTHER OPTIONS TO REDUCE DEPENDENCY ON PUBLIC DISTRIBUTION SYSTEMS (PDS) ; COMMENT 14. WE ENVISION NO BREAKS IN THE PIPELINE OF ESSENTIAL COMMODITIES IN THE MONTHS AHEAD, BARRING ANY UNFORESEEN NOTE : NOT PASSED TO ABOVE ADDRESSEE(S) BAGHDAD 00000089 004.1 OF 004 QASR, LABOR ISSUES , OR BREAKDOWNS IN DOMESTIC INFRASTRUCTURE. CPA , MOT, AND THE MINISTRY OF TRANSPORTATION CONTINUE TO COLLABORATE CLOSELY WITHIN THE COUNTRY , AND WITH WFP , TO PROTECT THE FOOD SECURITY INTERESTS OF THE IRAQI PEOPLE. WE ANTICIPATE CONTINUED CAPACITY-BUILDING THAT WILL LEAVE BEHIND NOT ONLY FOOD RESERVES ON JULY 1 , BUT IRAQIS CAPABLE OF MANAGING THE FOOD PIPELINE. BREMER NOTE : NOT PASSED TO ABOVE ADDRESSEE(S) BAGHDAD 00000089 0 04 . 2 OF 004 QASR, LABOR ISSUES , OR BREAKDOWNS IN DOMESTIC INFRASTRUCTURE . CPA , MOT, AND THE MINISTRY OF TRANSPORTATION CONTINUE TO COLLABORATE CLOSELY WITHIN THE COUNTRY , AND WITH WFP , TO PROTECT THE FOOD SECURITY INTERESTS OF THE IRAQI PEOPLE . WE ANTICIPATE CONTINUED CAPACITY-BUILDING THAT WILL LEAVE BEHIND NOT ONLY FOOD RESERVES ON JULY 1 , BUT IRAQIS CAPABLE OF MANAGING THE FOOD PIPELINE . BREMER NOTE: NOT PASSED TO ABOVE ADDRESSEE (S) BAGHDAD 00000089 004 . 3 OF 004 QASR, LABOR ISSUES , OR BREAKDOWNS IN DOMESTIC INFRASTRUCTURE . CPA, MOT , AND THE MINISTRY OF TRANSPORTATION CONTINUE TO COLLABORATE CLOSELY WITHIN THE COUNTRY , AND WITH WFP , TO PROTECT THE FOOD SECURITY INTERESTS OF THE IRAQI PEOPLE. WE ANTICIPATE CONTINUED CAPACITY- BUILDING THAT WILL LEAVE BEHIND NOT ONLY FOOD RESERVES ON JULY 1, BUT IRAQIS CAPABLE OF MANAGING THE FOOD PIPELINE . BREMER NOTE: NOT PASSED TO ABOVE ADDRESSEE(S) NNNN