Halliburton given $30m to expand Guantanamo Bay

A subsidiary of Halliburton, the oil services group once led by the US Vice-President, Dick Cheney, has won a $30m (£16m) contract to help build a new permanent prison for terror suspects at Guantanamo Bay, Cuba.

The Pentagon announcement, giving further details of the planned two-storey jail, complete with air conditioning and exercise and medical facilities, is a further sign that the Defence Secretary, Donald Rumsfeld, is determined to keep the jail in operation.

There are some 520 inmates from 40 countries at Guantanamo, some of them held there for more than three years. The new jail will be capable of holding 220 people. Under the contract with the US Naval Engineering Command, the work is to be finished by the end of July 2006. The final deal could be worth as much as $500m.

The work will be carried out by Halliburton's contracting subsidiary Kellogg Brown & Root (KBR). It will include site work, heating, ventilation and air conditioning, plumbing and electrical work.

Announcement of the deal comes when the whole future of Guantanamo, recently described by Amnesty International as "the gulag of our times," is under fierce debate in the US. There have been repeated allegations of mistreatment of inmates, bordering on torture.

A recent Pentagon report acknowledged incidents in which the Koran had been desecrated (though not flushed down a toilet, as claimed in a report by Newsweek magazine last month, which detonated deadly riots in Pakistan).

Not only Democrats but also several prominent Republicans - among them Mel Martinez, Florida Senator and former Bush cabinet member - have publicly argued that the damage to America's image caused by the prison now outweighs any practical benefits it might have. Joe Biden, the senior Democrat on the Senate Foreign Relations Committee, has described the prison's image as a "recruiting agent" for al-Qa'ida.

The administration itself seems divided on the issue. The White House has hinted at a possible closure, with a spokesman declaring that "all options" were under review. But Mr Cheney and Mr Rumsfeld have indicated that the prison will continue to operate. Both insist that there is no practical alternative, and that detainees are decently treated and still providing valuable information in the "war on terror".

The most recent suggestion came this week from a Democratic think-tank, the Centre for American Progress, which urges that long-term inmates be transferred to the military prison at Fort Leavenworth in Kansas and tried before military courts-martial. Low value and low security risk detainees should be transferred back to their home countries.

Like Guantanamo Bay, Halliburton has become something of an image problem for the US, a focus for criticism that Iraq reconstruction contracts have been handed out on a no-bid basis to a small group of US companies, and then subsequently suffered massive cost over-runs.

Mr Cheney headed Halliburton for five years, before resigning to become President Bush's running mate in the 2000 election.