Struggling for Power in Afghanistan

THE Western campaign for hearts and minds in Afghanistan is based
heavily on providing roads, dams, buildings and, especially,
electricity. The United States Agency for International Development, or
U.S.A.I.D., expects to spend $2.1 billion this year in Afghanistan. It
has been working there for half a century, since the Soviets and
Americans were competing to be the country's development partners.

So you'd think that a new five-year, $1.2 billion program that
U.S.A.I.D. has proposed to create a modern electrical grid there would
be a model. You'd be quite wrong.

When it comes to electricity, the agency has a dismal record, one that
needs to be reviewed now, before the grid plan moves ahead. Afghanistan
is in the bottom 10 percent of the world in electricity consumption per
capita; if recent patterns hold, it will stay there as U.S.A.I.D. and
the State Department try to appease the Afghan president, Hamid Karzai,
and also give American officials a veneer of victory over Afghanistan's
problems as American troops start to withdraw. President Obama's desire
to speed the withdrawal makes the issue more urgent.

As in Iraq, the main American electrical reconstruction effort in
Afghanistan is divided between U.S.A.I.D. and the Army Corps of
Engineers. Of the two, the Corps has proved far more efficient.

The biggest project until now has been a 105-megawatt diesel power plant
at Tarakhil, outside Kabul. It took the aid agency nearly three years
to get it built. And as documented by the reporters Pratap Chatterjee of
the CorpWatch news service and Marisa Taylor of McClatchy Newspapers,
the Kabul plant became emblematic of the agency's struggles.

Its contractors were the Louis Berger Group and Black & Veatch. Last year, U.S.A.I.D.'s inspector general
said delays and contracting problems at the project had cost nearly $40
million, out of a total outlay of more than $300 million.

The agency itself had criticized Black & Veatch in letters to the
company and in performance reports. So analysts who followed the
contracting - including academics, lawyers, legislators and journalists -
were stunned last October when U.S.A.I.D. offered Black & Veatch a
$266 million contract, without competitive bidding, for other electrical
projects in Afghanistan. The agency has cited the special challenges of
war-zone work.

And in the end, the Kabul plant most often has sat idle, as it
supplements power from abroad. Current prices for diesel fuel trucked
into a war zone have driven its operating costs to around 40 cents per
kilowatt-hour, seven times the 6 cents that a kilowatt-hour imported
over transmission lines from Turkmenistan, Uzbekistan or Tajikistan
costs.

Another U.S.A.I.D. failure was at the Shorandam Industrial Park, near
the city of Kandahar, which I visited with American military engineers
in April. In 2005, U.S.A.I.D. set out to install 10 diesel generators
able to produce 6.6 megawatts together. But it had a dispute with its
initial contractor about costs and later said the generators had been
damaged by an improvised explosive device.

After the generators sat in storage for five years, the agency
contracted with Black & Veatch to finally install them; now the
agency hopes to get the facility running this month. Meanwhile, the
Corps of Engineers contracted for a 10-megawatt facility on the same
site last July; it went into full operation on Dec. 2.

Why have two American agencies planned two different diesel-generating
facilities in the same location, but with different transformers,
switches, contractors and manufacturers? That's a good question - one of
many I couldn't get a sensible answer to in the three weeks I spent in
Afghanistan reporting for my magazine on the projects.

Now U.S.A.I.D. is about to start its five-year initiative to rebuild,
improve, expand and tie together Afghanistan's decrepit electrical
networks into a single modern grid. It's an excellent idea, but the
agency and the Afghan national utility are not up to the challenge.

In an annex to a U.S.A.I.D. report, dated March 5 and given to me in
Afghanistan, the agency outlines a nine-part mechanism for contracting
and financing the many projects. It indicates its intention to put the
national utility in overall charge, with the agency as a sort of
supervisor and intermediary with the Afghan Finance Ministry. Just last
week at a briefing in Washington, the utility's chief executive officer,
Abdul Razique Samadi, enthusiastically looked forward to getting to
work on the project.

According to the March 5 outline of the project, the utility would
control $906 million to be issued over five years - most of the budget.
But that makes no sense. The utility has no experience with large-scale
international contracting work, and most of its existing grids are
ancient. No technical specialist outside of U.S.A.I.D. with whom I spoke
in Afghanistan thinks the utility can direct and monitor the work of
perhaps dozens of Western contractors and subcontractors. "It's almost
like we're setting them up for failure," one development official told
me.

Why is U.S.A.I.D. pushing this scheme? It is under intense pressure from
two sides: from its State Department overseers, who want to show
progress before the troop pullouts are well under way, and from
President Karzai, who wants more control over development funds and
activities. Giving the utility and the Afghan Finance Ministry control
of this project could satisfy both parties, at least on paper.

At its core, the problem isn't the utility's inadequacy; it is
U.S.A.I.D.'s. The agency has shown an inability to manage large
electrical projects. Its programs change with the policy goals of the
American administrations it serves, and it seems to lack officials in
Afghanistan who arrived with prior experience in electrical projects and
contracting.

What to do? Turn the projects over to the Army Corps of Engineers. It
has performed better than U.S.A.I.D. on electrical projects in
Afghanistan; it is less hobbled by politics; it has experienced
engineers. It's critical that this happen soon, because the Corps can
expect to be withdrawn with the rest of the Army, even if the timetable
isn't set.

Yes, a transfer of responsibility would upset the delicate war-zone
power balance between the State and Defense Departments. And the
military isn't supposed to do long-term development overseas. But weigh
those objections against the record: U.S.A.I.D.'s performance in
Afghanistan's electrical sector has been so poor for so long that we can
expect many millions of dollars to be wasted unless the administration
acts now to give a vast new project a better chance of succeeding before
only the aid agency is left in Afghanistan to struggle with the job.

• 196 Corpwatch in the News