BASRA, Iraq — The idea back in May 2005 was to build a state-of-the-art children's hospital that would dramatically improve the quality of healthcare throughout southern Iraq. But that was before rival Shiite militias began competing for power in Iraq's second-largest city.

Today, construction remains unfinished. Dozens of workers on the project have been killed, and the project is significantly over budget. Some wonder if the hospital will ever be completed.

The fate of Basra's children's hospital shows how reconstruction efforts even in areas deemed by the West as relatively free of sectarian violence can become mired in local corruption and a pawn between rival militias jockeying for control in a post-Saddam Iraq.

The project started with high hopes and influential backers, including U.S. first lady Laura Bush and Secretary of State Condoleezza Rice. By early 2004, the U.S. Agency for International Development awarded a $50 million contract to build the 94-bed facility to San Francisco-based Bechtel Corp. In addition, the non-governmental organization Project Hope pledged $50 million in medical supplies and training.

Yet, despite Bechtel's claims that Basra was "was one of the most peaceful locales in Iraq," it failed to take into account that rival Shiite militias were competing to take over the city.

The hospital's construction crew became one of their main targets, in part because many in Basra were convinced that the United States was actually constructing a new detention center in the city rather than a children's hospital.

First, Bechtel's site security manager — a former colonel in the Iraqi army — was murdered in July 2005. Then the site manager resigned after receiving death threats. The company's senior Iraqi engineer quit after his daughter was kidnapped.

Then the regional director of the project moved his office to Sulaimaniyah in northern Iraq after being threatened. The project's chief engineer, a Sunni in the Shiite-dominated region, also left after being intimidated. Twelve employees of a plumbing and electrical subcontractor were killed in their offices. Eleven employees of a company that supplied concrete were murdered.

Soon, Bechtel found it nearly impossible to employ any local workers for the project.

By March 2006 the company warned that the project, already three months beyond its completion date, would cost $98 million to build, rather than the $50 million budgeted, and would not be completed until July 2007.

By the summer of 2006, the special inspector general for Iraq reconstruction put the price tag for the hospital at $170 million and questioned if it would ever be completed.

Finally, the U.S. government withdrew its contract from Bechtel in 2006 and assigned the U.S. Army Corps of Engineers as project manager. By the spring of 2007, about 60 percent of construction was completed at the facility. The hospital is now scheduled to open in January 2009.

Meanwhile, British forces have left the city and Shiite militias have become more violent as they compete for power and influence.

Will the hospital actually ever be completed? No one here is willing to say for sure.

Amir al-Khuzai, acting minister of health, tries to remain optimistic, saying that "despite all of the challenges, it is in everyone's interest" to finish the job.

Tiare Rath is the Middle East editor for The Institute for War & Peace Reporting, a nonprofit organization that trains journalists in areas of conflict. Material for this article was provided by IWPR reporters in Iraq whose names are being withheld out of concern for their security. Rath wrote this commentary for McClatchy-Tribune News Service.