Baghdad: An Iraqi lawmaker close to Prime Minister Nouri Al Maliki defended the government's record on spending for reconstruction, saying on Thursday that US critics were overlooking Baghdad's progress over the past three years.

But a senior Iraqi official and a private Iraqi economic analyst both acknowledged that inefficiency and a cumbersome, inexperienced bureaucracy were still causing delays in many projects aimed at improving the lives of Iraq's 27 million people.

A report Tuesday by the US General Accounting Office predicted Iraq could finish the year with as much as a $79 billion [about Dh290 billion] cumulative budget surplus due to the influx of oil revenues.

That raised a firestorm in the United States from critics who said American taxpayers were shouldering an unfair share of the reconstruction load at a time when Americans are suffering from high gasoline prices and Iraq is getting rich from oil.

Hassan Al Sineid, a Shiite lawmaker from Al Maliki's Dawa party, said the GAO report was "unrealistic" because it was based on incomplete information.

"In 2004, there was no investment budget. In 2005, the investment budget was $3 billion [about Dh11 billion]. In 2006 it was $11 billion [about Dh40 billion] and in 2007 was $12 billion [about Dh44 billion], he said. "In the years before 2008, less than half the investment budget was spent because of the security issue." He said parliamentary committees were now reviewing government spending programmes to make sure that funds were used properly.

His comments echoed some US officials in Baghdad, who acknowledged that the Iraqis had not spent funds fast enough in the past but that the situation was improving.

The officials spoke on condition of anonymity because the issue is politically sensitive. They cited problems of inexperienced bureaucrats, shortage of Iraqi contractors and a cumbersome approval progress - aimed at curbing corruption - for the delays.

A senior official of the Iraqi Planning Ministry described other problems, including delays in parliament approving the budget, which meant the ministries did not get their money until several months had passed. The official, Qasim Inaya, said other problems include red tape in issuing tenders and the fact that some ministries do not hand-deliver requests for funds to his ministry, relying instead on slow courier services.

"Security and stability are also reasons for delay," Inaya said. "Some ministries have projects in unsecured areas or disputed areas or not-yet-ready areas."

Bassem Jamil Anton, an economist and deputy leader of the Iraqi Businessmen's Association, blamed delays on a shortage of experienced Iraqi contractors because so many businessmen, engineers, architects and other skilled people have fled the country.

"Moreover, the local governments and the provincial councils lack experience needed to implement many projects," he said.

"These factors have created the cumulative budget surplus."

The Iraqi government is drafting plans for Iraqi-funded projects to include 1,000 new primary healthcare centres over the next 10 years, new airports and a major renovation project for downtown Baghdad, the American officials said.