The initial award was worth 34.6 million dollars, but it also provided for funding of up to 680 million dollars over 18 months, subject to Congressional approval, the US Agency for International Development (USAID) said.

Bechtel, based in San Francisco, was given the job of emergency infrastructure repair and rehabilitation.

"Restoration of the country's key infrastructure is a priority of the US government's effort to strengthen Iraq's economy and ensure delivery of essential public services to the Iraqi population," USAID said in a statement.

The contract called for the repair, rehabilitation or reconstruction of vital elements of Iraq's infrastructure.

It required Bechtel to assess and repair power generation facilities, electrical grids, municipal water systems and sewage systems.

The deal includes a provision for the rehabilitation or repair of airport facilities, and the dredging, repair and upgrading of the southern Iraqi port city of Umm Qasr.

The contract may also involve responsibility for the repair and reconstruction of hospitals, schools, ministry buildings and major irrigation structures, as well as restoration of essential transport links.

Bechtel was expected to work subcontractors on some tasks and to "engage the Iraqi population", USAID said.

"The capital construction contract is part of USAID's planned reconstruction assistance to the Iraqi people, aimed at helping maintain stability, ensure the delivery of essential services, and facilitate economic recovery," the government agency said.

It was one of eight Iraqi reconstruction contracts for which the USAID had solicited bids.

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