Equation for Iraq: 2,000 Projects = Progress

Stories of homicide bombers or kidnappers get most of the news headlines out of Iraq (search) but U.S. officials working in the country want Americans to think about other things when they mull the millions of tax dollars spent there.

U.S. and Iraqi workers are joining to complete 2,000 projects funded by U.S. taxpayers, which Charlie Hess said is a sign of "good progress ... for their kids."

Local Iraqis "want clean water … adequate and decent homes, good schools and quality of life,” Hess, who is the director of the Project and Contracting Office, said.

According to its Web site, the Project and Contracting Office aims to "serve the people of the United States and Iraq by contracting for and delivering services, supplies and infrastructure identified within the Iraqi Relief and Reconstruction Fund, a total $18.4 billion in resources allocated by the U.S. government and taxpaying public for the rebuilding of Iraq."

In Baghdad, workers are erecting hospital, and in Kurdistan, Americans and Iraqis have come together to construct a $10 million electricity substation that will supply power to thousands of homes.

"It's wonderful to see all the Iraqi workers that are here working on a very important project," U.S. Gen. Thomas Bostick (search), who is charged with overseeing reconstruction in all of Iraq, said. "For the city, it's a very powerful message."

Part of the project will supply vital water to the community. Local families told FOX: "We are so grateful to the American people. We've never had fresh water pumped into our homes before."

And near Kirkuk, plans are in progress for a $100 million water project.

Yet the projects do not go off without concerns: Security is the biggest problem faced by those rebuilding Iraq.

For those Iraqis unsure of the benefits of joining to help rebuild, Bostick says: "We're hoping with reconstruction advancing throughout the country that they will pick up shovels and hammers instead of AK-47s and grenades."

Daily bombings and other attacks are monitored at the nerve center, officially called the Reconstruction Operations Center (search), known locally as the ROC.

FOX News was the first TV outlet allowed to film at this top-secret headquarters in Baghdad. It is here intelligence is collected and passed on to contractors.

At least 200 people, westerners and Iraqis, working on reconstruction have been killed, but Hess says the risk is worth the progress.

“That's the price that has to be paid for freedom for the Iraqis," he said.

In hard cash terms, Hess holds the purse strings on $12.5 billion.

The biggest cost so far is $5 billion on security and the legal system; another $3 billion is being spent on restoring Iraq's crippled electric grid. And more than $1 billion has been allocated to public works and water treatment.

Hess has had to struggle with allegations of lack of control over spending by the Coalition Provisional Authority (search), but he says the U.S. taxpayer has no need to worry.

"My belief is there are significant investments to protect the interests of the public and taxpayers' money,” he said.

These are the projects that don't normally make it on to the news: the building of power plants and water treatment plants, as well as the new hospital.

On paper they are all multimillion-dollar investments, but the value for Iraqi lives is incalculable.

FOX News' John Cookson contributed to this report.

Compiled by FOX News' Heather Scroope.

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