"The deteriorating security situation across Iraq continues to impede progress in the reconstruction program, causing project delays, preventing travel to many sites, increasing security costs, and endangering contractors' lives," the Office of the Special Inspector General for Iraq Reconstruction (SIGIR) said in a quarterly report.
"Sabotage of Iraq's infrastructure, particularly in the electricity sector, hindered reconstruction efforts this quarter," wrote Iraq Inspector General Stuart Bowen.
Bowen noted setbacks in updating the country's aging power infrastructure.
"The power problem in Iraq is compounded by the fact that repairing power lines is nearly impossible because of sniper attacks and death threats to repair crews," he said.
Inefficient bureaucracy and corruption have proved to be an additional drag on development, SIGIR said in its 11th quarterly report to lawmakers.
"Part of the problem reportedly arises from bureaucratic resistance within the Ministry of Finance, which traditionally has been slow to provide funds," he wrote, adding that "corruption afflicts a number of government of Iraq ministries."
"SIGIR remains concern about challenges confronting the fight against corruption within the government of Iraq."
Iraq ranks 137th of the 158 countries in Transparency International's 2005 Corruption Perception Index.

Copyright AFP (Agence France-Presse), 2006