Irritation grows as residents deprived of air-conditioning and running water three years after the US-led invasion watch the massive US Embassy they call “George W’s palace” rising from the banks of the Tigris.

In the pavement cafés, people moan that the structure is bigger than anything Saddam Hussein built. They are not impressed by the architects’ claims that the diplomatic outpost will be visible from space and cover an area that is larger than the Vatican city and big enough to accommodate four Millennium Domes. They are more interested in knowing whether the US State Department paid for the prime real estate or simply took it.

While families in the capital suffer electricity cuts, queue all day to fuel their cars and wait for water pipes to be connected, the US mission due to open in June next year will have its own power and water plants to cater for a population the size of a small town.

Officially, the design of the compound is supposed to be a secret, but you cannot hide the giant construction cranes and the concrete contours of the 21 buildings that are taking shape. Looming over the skyline, the embassy has the distinction of being the only big US building project in Iraq that is on time and within budget.

In a week when Washington revealed a startling list of missed deadlines and overspending on building projects, Congress was told that the bill for the embassy was $592 million (£312 million).

The heavily guarded 42-hectare (104-acre) site — which will have a 15ft thick perimeter wall — has hundreds of workers swarming on scaffolding. Local residents are bitter that the Kuwaiti contractor has employed only foreign staff and is busing them in from a temporary camp nearby.

After roughing it in Saddam’s abandoned palaces, diplomats should have every comfort in their new home. There will be impressive residences for the Ambassador and his deputy, six apartments for senior officials, and two huge office blocks for 8,000 staff to work in. There will be what is rumoured to be the biggest swimming pool in Iraq, a state-of-the-art gymnasium, a cinema, restaurants offering delicacies from favourite US food chains, tennis courts and a swish American Club for evening functions.

The security measures being installed are described as extraordinary. US officials are preparing for the day when the so-called green zone, the fortified and sealed-off compound where international diplomats and Iraq’s leaders live and work, is reopened to the rest of the city’s residents, and American diplomats can retreat to their own secure area.

Iraqi politicians opposed to the US presence protest that the scale of the project suggests that America retains long-term ambitions here. The International Crisis Group, a think-tank, said the embassy’s size “is seen by Iraqis as an indication of who actually exercises power in their country”.

A State Department official said that the size reflected the “massive amount of work still facing the US and our commitment to see it through”.

BEHIND SCHEDULE

A US Inspector General’s report into reconstruction found that although $22 billion had been spent, water, sewage and electricity, infrastructure still operated at prewar levels

Despite “significant progress” in recent months, less than half the water and electricity projects have been completed

Only six of the 150 planned health centres have been completed

US officials spent $70 million on medical equipment for health clinics that are unlikely ever to be built. More than 75 per cent of the funds for the 150 planned clinics have been allocated

Task Force Shield, the $147 million programme to train Iraqi security units to protect key oil and electrical sites failed to meet its goals. A fraud investigation is under way

Oil production was 2.18 million barrels per day in the last week of March. Before the war it was 2.6 million