Deconstructing the Reconstruction

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Special to CorpWatch

Near Kabul City in the village of Qalai Qazi, Afghanistan, stands a
new, bright-yellow health clinic built by American contractor The Louis
Berger Group. The clinic was meant to function as a sterling example of
American engineering, and to serve as a model for 81 clinics Berger was
hired to build-in addition to roads, dams, schools and other
infrastructure-in exchange for the $665 million in American aid money
the company has so far received in federal contracts.1



The problem is, this "model" clinic was falling apart: The ceiling had
rotted away in patches; the plumbing, when it worked, leaked and
shuddered; the chimney, made of flimsy metal, threatened to set the
roof on fire; the sinks had no running water; and the place smelled of
sewage.2

But Afghanistan, bombed into submission by the world's
superpowers and brought low by civil wars over the past two decades is
desperate for infrastructure. It is desperate for health clinics,
schools, and roads. The people here take what they can get, because
they have little choice.

A sign in front celebrates the organizations involved in funding and
building the clinic under the authority of the Afghan Ministry of
Health. But initially the ministry's own engineers would not clear the
clinic for use because of its glaring structural flaws. Mirwais Habibi,
the health facility's adviser to the ministry, detailed his concerns in
a report: "The plumbing system in the building from what could be
observed visually meets no standard norms or plumbing code. Another
design issue that begs attention is the fume chimney pipe, which is
provided for heating stoves. The fume pipe is made of light gauge metal
that can deteriorate in time and may cause fire in the wooden roof."3

But the clinic was opened anyway. Berger disagreed with Habibi's
assessment and said he was not a qualified engineer capable of
inspecting the clinic. Berger's contract requires it to build
structures that meet American construction and seismic codes, but there
is no reliable system in place for assuring that the standards are met.
Since 2003, doctors at the Qalai Qazi clinic have treated about 100
patients a day, according to Mohammed Saber, the clinic's
around-the-clock guard.

I visited the clinic one afternoon in October 2005. It was Ramadan, and
the clinic closed early each day. When I arrived, the doctors had left
for the day. An old woman swept the floors and they gleamed. But like
so many new structures here, the window dressing can't hide the ugly
reality  that wafts from bathroom drains and leaks from decayed
ceilings. Even the staff kitchen had no running water.

"It's better than nothing," Saber said.4


WHAT IS THE LOUIS BERGER GROUP?

The Louis Berger Group is a privately held engineering consulting company based in New Jersey. Since its founding in the 1950s, it has built roads across the United States and around the world, including major highway projects in Burma, Nigeria, the Balkans, and the Amazon. It has consulted on pipeline projects in Kazakhstan, devised social and economic rehabilitation plans in Iran, Cambodia, and Nicaragua, and taught Muslim rebels in the Philippines the farming trade. The company brings in about $500 million in annual revenue, and employs 4,000 people world-wide. As of 2002, The Berger Group had almost 100 federal contracts worth over $143 million. It's contracts in Afghanistan since then amount to another $665 million. The Berger Group is smaller than most of the major contractors awarded contracts, but its connections to Washington are powerful. According to the Center for Public Integrity, "Chairman Derish M. Wolff was appointed tothe State Department's Industry Advisory Panel in December 2001. He was also a member of the 1986 Presidential Trade Delegation to Japan and has been a member since 1987 of the Bretton Woods Committee," an organization dedicated to furthering the goals of economic globalization.9


Fred Chace, deputy operations manager for Berger in Afghanistan,
insists that in general, if Berger skimps anywhere, it's only on
cosmetics, like moldings, and not on functional aspects of the
construction. But even Chace admits the problems with this clinic are
more than cosmetic. He said in an interview in Kabul that the clinic
suffered from "defective workmanship," but blamed the subcontractor.5
The Washington Post discovered an internal Berger inspection report
four months after Habibi's report that noted "the clinic needed new
eaves, gutters, doors, handrails, floor tiles, drywall and a ceiling."6
Berger said the subcontractor responded to the complaints as
constructive criticism, because the work in Afghanistan is, for them, a
"learn-while-doing exercise." Berger said the problems were fixed by
the subcontractor in November 2005 and it had asked its donor, the
United States Agency for International Development (USAID), in February
2006 for final turnover to the Afghan government.7

But the Qalai Qazi clinic is no aberration. Another Berger clinic was
inexplicably planned in the remote, sparsely populated province of
Badakhshan in a location surrounded by mountains and accessible in
winter only by helicopter. That clinic was built on earthquake-prone
land. "It's susceptible to landslides and the land has a crack in it
already," said the health director of the province, Abdul Momin Jalali
in a December 2005 telephone interview.8 Now it will be
demolished and rebuilt elsewhere. The clinic was supposed to be
completed in 2004. Two other clinics promised for the area have also
been delayed.

THE THIN VEIL OF SUCCESS

The Bush Administration touts the reconstruction effort in
Afghanistan as a success story. Perhaps, in comparison to the
violence-plagued efforts in Iraq and the incompetence-riddled efforts
on the American Gulf Coast, everything is relative.

From 2002 to 2005, USAID budgeted more than $3.5 billion for
Afghanistan in the following sectors: democracy and governance,
infrastructure, agriculture, training for alternative careers to
replace the traditional poppy cultivation, economic growth, education,
health, and finding work for disarmed militias. In an accounting its
results, USAID boasts that:

  • 7.4 million Afghans now have access to improved health care;
  • The highway between Kabul and Kandahar is complete (and paved
    with asphalt), which has reduced travel time from 13 hours to just five;
  • 100,000 teachers have been trained; 
  • 50 million textbooks have been printed;
  • Five million children are in school-up from 900,000 in 2001;10

But there are other numbers that show a darker side:

  • An Afghan woman dies in childbirth every 30 minutes;
  • Only 1 in 20 babies is delivered by a trained attendant;
  • 20 percent of Afghan children will die before age 5;
  • Schools are being burned in the south of the country and teachers beheaded in front of their students;
  • Women's literacy rate is 19 percent;
  • Corrupt commanders (warlords) have solidified control over their territories;
  • Unemployment in the capital is 30 percent;
  • 3.5 million from a population of about 25 million Afghans are hungry and reliant on food rations.11

Few expected the international community to fix all these problems
in five years, but taxpayers do expect their aid money to be spent
responsibly. Millions of dollars of international aid money has been
mismanaged, misused, and wasted. It's partly down to a flawed system
that fails to coordinate between the Afghan government and the donors,
a lack of leadership, and the widespread local corruption and violence
that hinder the reconstruction effort. Many development experts find
the process by which aid contracts and loans are awarded to be
counterproductive. International and national aid agencies-including
the World Bank, the International Monetary Fund (IMF) and USAID-that
distribute aid money to developing countries have, in effect, designed
a system that is efficient in funneling money back to the wealthy donor
countries, without providing sustainable development in poor states.


The United States' own inventories have acknowledged that efforts so
far have fallen short of nearly every goal. The Government
Accountability Office report presented to Congress in 2005 states that,
although improvements to basic infrastructure have been made in
Afghanistan, security and other obstacles have held back many of the
reconstruction goals that USAID set forth four years ago, under which
it doles out and oversees billions of dollars in reconstruction and aid
contracts. The Afghanistan Freedom Support Act of 2002 was Congress'
attempt "to create national security institutions, provide humanitarian
and reconstruction assistance, and reinforce the primacy of the central
government over Afghanistan's provinces."12 But four years
later, after the American-led invasion ousted the Taliban and the
Western-backed Karzai government took control, security has only gotten
worse. More than 1,500 people were killed in the escalating violence in
2005 alone, the largest number in a single year since the fall of the
Taliban. The institutions developed to deal with security, such as the
Afghan National Army and police, are teetering along with few resources
and little experience. Karzai's control in the provinces has improved,
especially in the north, but not enough to stop local warlords from
terrorizing innocent Afghans.

But lack of security alone cannot account for the Qalai Qazi
clinic's leaky roof, or the bureaucratic foul-up that led Berger to
build a health clinic in an earthquake- and landslide-prone no-man's
land. Those and other embarrassments can be traced to any number of
other factors not accounted for in federal reports: election-year
political pressure by both the Bush administration and the Karzai
campaign, and a fundamentally broken contracting system that rewards
corporations for mediocre work and subjects them to little or no
oversight or accountability. It's lip-service given to
"nation-building."

That is not to say that all of Berger's projects, or other
reconstruction efforts, have not seen modest success in five years.
Verifiable progress is visible in many provinces and the capital.
Kabul, which still has only a few hours of electricity each day, is
bustling with signs of Western-style commerce, such as the new
five-star Serena Hotel which charges $250 to $1,200 a night (affordable
only by visiting dignitaries, wealthy contractors, and the odd opium
magnate), and the new Kabul City Center mall with perhaps the only
working elevator and escalators in the country. But for the 3.5 million
people who need food aid, the idea of shopping in a glistening mall is
hardly practicable. So too, the stores peddling new technological
gadgets and appliances are beyond the imagination of citizens who have
no reliable source of electricity.

But there are other signs of a nation awakening from years of
torment and repression. Other cities are illuminated by electricity
purchased from neighboring nations: In the west, the city of Herat has
24-hour electricity bought from Iran and Turkmenistan; in the north,
Uzbekistan sells power to the city of Mazar. The Afghan media are
openly critical of the government, and the number of radio and
television stations and news publications continues to rise, producing
a lively and unprecedented public discourse. The sound of drills and
forklifts and the sight of laborers shoveling dirt and piling bricks
look encouraging. Perhaps most importantly, Afghans are still hopeful
and are working for change. But many of them are beginning to realize
that the promises made by the United States and the international
community are not materializing.

HOW AID MONEY IS ALLOCATED

A conference in London in early 2006 brought yet more pledges of aid
money. More than 70 countries participated, and high-profile
dignitaries such as British Prime Minister Tony Blair and Secretary of
State Condoleezza Rice spoke to the importance of rebuilding
Afghanistan. But Afghans are skeptical about how the $10.5 billion
pledged will be spent.

There are dozens of agencies worldwide coordinating aid
money-the problem is, none of them is coordinating with the others.
Bilateral aid-that is, aid from a single nation-may come from a
national government and be spent in accordance with the rules and
expectations of the donor government. Multilateral aid, or aid from a
coalition of donor countries around the world, may be pooled in trust
funds and disbursed under the auspices of an international body such as
the World Bank, the International Monetary Fund, and the United Nations
Development Program (UNDP). The majority of aid pledged worldwide is
placed in the Afghanistan Reconstruction Trust Fund (ARTF) and
administered by the World Bank and the Afghanistan Reconstruction
Group. The ARTF differs from most World Bank trust funds in that it is
dedicated to funneling money directly to the Afghan government to be
used according to its priorities, rather than according to the
priorities of the donor nations.

 THE POPPY DEVELOPERS

It's not just money from the United States or the World Bank pushing the country forward. Where the international community fails, drug kingpins are making inroads. Although the GAO has characterized Afghanistan's thriving heroin trade as one of the worst setbacks to reconstruction, drug money has financed reconstruction in many areas. Afghanistan is the largest poppy producer in the world and in 2005, the country exported about 4,1000 tons of opium.13 In the remote province of Badakhshan, where Berger's clinic had to be demolished, a famous drug smuggler built a functioning clinic. Women in that province use the profits from their poppy farms to better their lives, whether it's buying a new outfit or a generator.14 Few average Afghanistan afford the four-story marble homes being built in the capital, but the larger poppy growers and drug traffickers often can.



But the World Bank still chafes at nations, especially the
United States, that still insist on bypassing the ARTF and
administering their aid money bilaterally.

Jean Mazurelle, the World Bank director in Kabul, estimates that 35 to
40 percent of all international aid sent to Afghanistan is "badly
spent."  He told Agence France Press, "In Afghanistan the wastage of
aid is sky-high: there is real looting going on, mainly by private
enterprises. It is a scandal. In 30 years of my career, I have never
seen anything like it." Mazurelle said the corruption and fraud have
soured Afghans' feelings toward the international community.15

International donors channel three quarters of funds to private projects not under government purview.16
In effect, the World Bank. IMF, UNDP, and United States government have
more control over the economy of Afghanistan than does that country's
own democratically elected government. Donor nations and agencies
defend this fact by insisting that they are more effective at ensuring
efficiency and accountability, and that handing over billions to the
Afghan government is an invitation to graft and corruption. But the
facts don't seem to bear this out. The World Bank's own report
questions that very logic.

In "Managing Public Finances for Development," released in
December 2005, the World Bank condemned donor nations for undermining
the Afghan government and wasting aid money. 17

Alastair McKechnie, the World Bank country director for
Afghanistan, said: "Experience demonstrates that channeling aid through
government is more cost-effective. For example a basic package of
health services contracted outside government channels can be 50
percent more expensive than the package contracted by the government on
a competitive basis. Furthermore, the credibility of the government is
increased as it demonstrates its ability to oversee services and become
accountable for results to its people and newly-elected parliament."18

In the case of the Louis Berger Group, its contract to build 23
schools across Afghanistan has so far resulted in an average
cost-per-classroom of $22,813, but its "model" 20-room school in Kabul
cost a whopping $592,690. Berger justifies the high figure by saying
that it was top quality construction with an iron truss roof system.
The head engineer at the Ministry of Education's construction
department said that Afghans could complete a school with the same
number of classrooms for half that price.19

In the United States, aid cash is doled out through twin
spigots, USAID and the Pentagon. One of the ways that the Pentagon
distributes money is via the Army Corps of Engineers. The money is
allocated according to the United States' own political, strategic, and
military priorities, rather than according to what the recipient nation
might consider most important.

Bilateral and multilateral aid agencies each have their own
protocols for disbursing aid money and monitoring spending. The result
is a tangle of conflicting bureaucracies that make efficiency and
accountability practical impossibilities. This outcome should surprise
no one: In 2002, USAID promised to refurbish or build from scratch 286
schools by the end of 2004. Only eight of those projects were completed
by September 2004.20

According to the July 2005 GAO report, USAID lacks a
comprehensive strategy to execute its plans, did not require
contractors to adhere to contractual obligations guaranteeing
accountability and supervision, and sometimes lost track of major
projects it funded.21

USAID manages the disbursement of taxpayer money earmarked by
Congress for international aid. The agency gives many grants to NGOs,
but for major development projects, USAID solicits bids from
corporations and is obliged to choose the lowest bid by a qualified
bidder. Yet in practice, the winning company is frequently the one with
the most influential contacts in the government and most effective
lobbyists. And it is almost without exception an American firm. There
are good reasons for this, familiarity and access being the most
obvious, but also that the money fuels the United States economy at the
same time it rebuilds Afghanistan's. The Afghan government rarely has
access to or control of the cash "given" to it as aid. There is good
reason here, too: Afghanistan's nascent democracy is still riddled with
corruption, and there are plausible suspicions that the funds would be
siphoned off by warlords and crooked politicians. An official at USAID
said the chance of the agency giving aid directly to the government is
unlikely: "We need clear standards of accountability and transparency."22

But USAID and other donor groups, including the Pentagon, can
hardly guarantee that their money is spent any more effectively by
their own contractors. Contractors-particularly private Western firms
like DynCorp and Halliburton-have proven as capable of shadiness as any
government. One Afghan-American expatriate who has worked with foreign
contractors in Afghanistan said, "The international companies are more
corrupt than the local companies because they're here short-term,
tax-exempt, make a profit and leave."23 USAID has an
internal monitoring system to track the contracts it grants, but with a
staff of 150 managing billions of dollars in aid, there are not enough
people to supervise the contractors. So, USAID granted a contract to
International Relief and Development, Inc. (IRD) to monitor its other
contracts. IRD and Louis Berger are not friendly.

While there is a minimal level of transparency and
accountability to USAID's processes, the Pentagon, which is trying to
win hearts and minds through reconstruction in Afghanistan, provides
almost no public access to how its funds are spent (for reasons,
usually, of "national security"). The Pentagon has hired hundreds of
American contractors to work in Afghanistan, in effect privatizing
military and diplomatic operations there. A visit to Bagram Air Force,
where the American military houses most of its troops, reveals the
extent of the corporate presence. Employees of American companies from
Kellogg, Brown and Root (KBR)-a subsidiary of Halliburton-to the Titan
Corporation work inside the base building structures and interrogating
prisoners.

The Army Corps of Engineers, the Pentagon's civil engineering
arm, has contracted with three major construction firms to design and
build barracks for the American and Afghan militaries. In a 2005 audit,
the Department of Defense Office of Inspector General accused the Corps
of grave failures in planning and execution, resulting in the loss of
millions of dollars, and potentially violating U.S. law.24

The report reviewed 15 contracts worth $782 million awarded by
the Corps and found systemic problems. Design and construction
specifications were vague and continued to change, which increased
costs. In another, $35 million earmarked for operations and maintenance
were "inappropriately" used for construction work, a possible breach of
the Antideficiency Act.  Communication between Corps operatives in
Afghanistan and headquarters in Virginia was weak and ineffective. The
audit found that the Corps routinely failed to negotiate fair and
reasonable prices with companies, and sometimes failed to award
contracts to the most qualified bidders. Other times, the Corps awarded
fixed-price contracts that gave incentives to companies to inflate
costs. In at least one case, the Corps paid a contractor for
"out-of-scope" work not even called for in the awarded contract. And
perhaps most tellingly, two separate procurement officers awarded
lucrative contracts for the same project, thanks to a lack of
communication.25

The system is ripe for exploitation and absurd inflation. In
April 2003, for example, a contractor was assigned a task order for
housing improvements at the Kabul Military Training Complex. It began
as a $14.5 million job calling for the renovation of one building and
construction of 16 others. By October 2004, the contract had been
modified to 13 renovations and 22 structures and the price tag had
jumped to $48.1 million, with only 80 percent of the work completed.26

The Corps contested many of the report's allegations. Nothing illegal
was done and "auditors appear to have misread" a task order and money
was not wasted, according to a lawyer for the Corps.27

SPEED and EXPEDIENCE

There is political pressure from Washington and Kabul to buff
the image of Afghanistan as a success story, especially as the war in
Iraq drags on. USAID, which coordinates reconstruction contracts, in
turn puts pressure on its contractors to do more work faster. The
contractors chafe under the pressure, cut corners, and lean on their
subcontractors and underqualified local laborers. When the inevitable
failures result-a clinic with a fresh coat of paint but a rotting
interior, or a highway that begins to disintegrate before it's
finished-the blame ricochets around.

It often seems that the priority here is not so much progress as
the appearance of progress. Peggy O'Ban, a spokeswoman for USAID in
Washington, DC, admitted in an interview at the USAID headquarters that
political considerations and American ideological goals have affected
reconstruction. "The U.S. government is not there to build schools, but
a free society-which schools and education are a part of. GAO was
looking at schools but we were looking at the bigger picture. The
dynamic is an evolving judgment call. Along with programs, there are
cultural and political imperatives," she said. "The quality may be
affected if it's between one layer of asphalt or two, for example. [The
Kabul to Kandahar highway] wasn't just to build a road but to show that
the transitional government can get things done. Free society is the
goal."28

THE AFGHAN RESPONSE

Many Afghans-not to mention the contractors who are struggling
to rebuild a country decimated by 23 years of war-simply believe that
"beggars can't be choosers" and that Afghans should appreciate what
they get. A heavily landmined, politically chaotic, desolate, and
rugged nation awakening from war cannot be made into Shangri-La
overnight.

But some Afghans refuse to settle for broken promises and
third-rate infrastructure. Local politicians and activists complain
that the $10 billion in reconstruction money that the international
community has donated so far has been largely wasted. The locals are
losing faith, and patience.

Residents in Kabul see the upscale homes, cars, and lifestyles
of the employees of foreign contractors-all while the capital grows
more crowded, polluted, and unmanageable. New buildings with tinted
windows and new shops with expensive clothes may be a sign of some
economic progress to Westerners, but it's not what Afghans need most:
paved roads, fresh water, electricity, and a sewage system.  

Afghans blame the waste on foreign and local corruption and some are
organizing themselves to lobby donor nations to invest money with
better monitoring and evaluation systems in local companies and
government ministries. Ramazan Bachardost, a member of the newly
elected parliament, built his platform on a promise to fight local and
foreign corruption. Sources in the international community also say
mismanagement, overspending, and-at the core-corruption, are serious
problems among international contractors working to rebuild
Afghanistan.

"If truth be told, there will be indictments coming out of
Afghanistan. There have been many efforts to hide the truth but it will
come out in bits and pieces over time," said a Washington, DC-based
consultant who worked for an American contractor for two years in
Afghanistan.29

CONSTRUCTION FOLLIES

I am writing this in my apartment in one of the "posh" new
buildings constructed in 2004 near downtown Kabul.  The landlord is an
Afghan businessman who imports gasoline. The shiny building, across
from a mosque and wedding hall, is five-stories tall with tinted
windows. My roommate and I pay $300 a month in rent, the going price in
the city. But few locals could afford such relative luxury where a
civil servant's salary is just $50 a month. And this is no Trump Towers.

Our building was not constructed to be earthquake-safe, which is a
false economy when you consider that earthquakes are nearly as common
here as in California. The lack of seismic standards in new
construction here makes earthquakes far more deadly than they are in
the United States or Japan. When the ground shakes, the walls crack and
the doorframes are shifted off plumb. In our apartment, none of the
doors close properly.

Our bathroom drains emit the stench of sewage because of the
faulty plumbing. We come up with our own solution, because the landlord
doesn't do anything about it when we complain. We fill Ziploc bags with
water and lay them over all the drain openings. We hold our breath when
we brush our teeth or wash our hands. The pipes in the walls leak
constantly, and the water seeps into the plaster. The lightest touch
sends disintegrated wallboard cascading to the floor. There's no
insulation in the walls, and the gaps in our misshapen door and window
frames allow icy winds to blow directly into the apartment. The
building's exterior was never finished with a primer or sealant, so
when it rains, the moisture soaks through and beads on the interior
walls. Metal beams supporting the ceiling of our living room are
rusting, the rust is bleeding through the paint, and the paint is
cracking. The list goes on.

I have lived here for eight months and in the spring and summer,
I had water and electricity most of the time. But as temperatures drop
below zero in early December, I get 15 hours of power for the week. In
order to get water, we need electricity to pump it from a shared well
into tanks on top of the building roof. No power, no water. We're some
of the few people in the building with a generator, so we volunteered
to help the rest of the tenants. We bought an electrical cord that
reaches down four floors to the well. It takes five hours of generator
power to fill some of the tanks on the roof. For warmth, we use gas and
a wood heater. Late at night, when I can't disturb others with the roar
of the generator, I can write only as long as my laptop battery lasts.
I see with a gas lamp. The gas fumes give me a headache.

There is plenty to complain about but I know that I can leave
this country at anytime. My neighbors, on the other hand, are stuck
behind these pretty, reflective windows that hide the realities inside.
Foreign dignitaries and television cameras can only see the shiny
windows and new-looking construction.

A GLORIFIED DIRT ROAD

Very little in Afghanistan could be considered "well-made."
Soviet-era construction is notoriously flimsy. But for sheer lack of
durability, you need look no further than some of the reconstruction
projects undertaken in just the last few years.

For example, a U.S.-funded highway here in the northern
provinces of Afghanistan is disintegrating even before it's been
finished. By the time it came to buy construction materials, project
money has trickled  through so many agencies and contractors, that all
contractors could afford was second-rate goods requiring annual
maintenance-an expense Afghanistan cannot afford. The resulting paved
road is little improvement over the dirt road it replaced.

The $15 million for the project originally came from USAID,
which gave it to the United Nations Office of Project Services, which
in turn hired The Berger Group as a consultant. The UN also contracted
with the Turkish firm Limak to build the road itself, and Limak, in
turn, hired on a partner, an Afghan-American construction company, ARC
Construction Co.

The project had begun as a campaign promise from Hamid Karzai.
On the campaign trail in 2004, Karzai was trying to buy the loyalty of
Afghans in warlord-controlled regions such as this northern territory,
where the local commander was also running for president. Karzai, the
candidate favored by the United States government, could promise big
infrastructure improvements if he won, since the Bush Administration
had the aid money to back him up.

Accompanied by then-American
ambassador Zalmay Khalilzad, Karzai visited the area and tried to win
over the locals with a pledge to build a 10 meter-wide paved highway
from Sar-e Paul province and Shiberghan, the capitol of Jawzjan
province.30 Karzai's strategy worked. The locals helped
elect him, but today many of them believe they were hoodwinked. They
are left with a crumbling 8 meter-wide gravel road and a healthy case
of buyer's remorse.

Where did the money go? Between USAID at the top and ARC
Construction at the bottom, most of the money was siphoned off for
"overhead" and profits. Louis Berger reports that $4 million alone was
spent on setting up and moving the mobile camp that housed employees,
and on importing construction equipment from Turkey. Another $1.6
million has gone to the salaries of 12 Afghan and three international
inspectors. Monthly pay is about $90 for the hundreds of laborers and
up to $5,000 for engineers and supervisors depending on experience and
nationality.31 As is traditional, the companies
involved-from the primary contractor to the lowest sub-contractor, take
6 to 20 percent-depending how high on the ladder they are positioned.
After the expenses, salaries, and profits have been taken out, there
isn't enough money to build a decent road.

The Berger Group insists it is not beholden to political
promises or even community expectations, but that it answers to a
higher power: the spending cap on its contracts. "I understand their
problems and needs but I also have an obligation to keep within the
budget of the taxpayers' money. To the community, we're guilty until
proven innocent," said Peter Pengelly, Berger's project manager in the
camp.32

Now the highway needs yearly maintenance (which has not been
funded) to withstand weather and traffic conditions. Consultants with
Louis Berger who are working on the road say petroleum trucks driving
on the new road are leaking oil and already creating potholes. Without
maintenance, the road will not last more than five years, according to
one of the engineers. And the Afghan government is unlikely to make
maintenance a priority in this remote and no longer politically useful
part of the country.

There have been bigger scandals and more damaging examples of
mismanagement and corruption in the reconstruction of Afghanistan. But
the Shiberghan highway is a cautionary tale about the pitfalls of
privatizing reconstruction: wasted money, empty political promises,
lack of central or local government control and basic cultural and
business misunderstandings that win resentment instead of hearts and
minds.

The Shiberghan story has also exposed something new:  the
beginnings of what may become a grassroots movement among the local
citizens, who are starting to protest and to demand what they want. For
every reconstruction project in Afghanistan, someone will complain
about poor construction work and slow pace, but few take political
action. But the Shiberghan highway ignited an anger that united the
community. About 1,000 drivers, farmers and other concerned Afghans
signed a petition complaining that the road is substandard and
demanding what they were promised.33

Among the locals' complaints: The highway does not have
shoulders for emergency stops. Where will the bicycles go? asked one
cyclist who makes several trips across the road daily. Drivers say the
gravel on the road has punctured their car tires and broken their
windshields. They say the potholes that the fuel trucks leave create
hazards and delays, and when they change a tire, the jack itself sinks
into the gravel, creating another pothole and leaving fresh cracks in
the roadbed.34

The real discontent with the road is about water. The road is
built close to mud homes, which have been here for decades. The old
dirt road was low, and allowed run-off in the wet season to drain away.
The new road is built atop a raised berm, blocking drainage. If a heavy
storm strikes, the villagers fear the mud homes they built with their
hands will collapse.

A petition was submitted to the governor of Sar-e Paul province.
But the governor has no power over the single major highway in his
jurisdiction; the road was designed and built by outsiders and
therefore outside the scope of his influence. Only the United States
has the power and the money to address their concerns, and it isn't a
priority.

"USAID can take advice and suggestions from the Afghan
government but they don't have to listen to it. USAID will spend the
money in the way they want," said one of the contractors.35

On a sunny Friday morning in October, three villagers dug a
ditch right through the new roadbed in an attempt to create a drainage
canal before the rainy season. They were caught in the act and arrested
by the local police for damaging public property. Habib, the tribal
head of the village, defended  the ditch. "Seventy families live in
this village and we're happy about this road, but we do not want our
homes to fall because of it. We need a drain for the water," he said.36

In the circular logic of bureaucracy, the contractors point out
that, legally, no structure may be within 30 meters of the road,
according to an obscure and rarely enforced Afghan highway law. 
Therefore, they argue, it's not the builder's responsibility to deal
with homes that may flood because they are too close to the road, even
though the homes were there first. When they realize that even logic
doesn't work, the frustrated villagers dig a ditch in the road two
months later.

In addition to fears of flooding, a major concern among locals
is irrigation. The new highway has blocked their rudimentary canal
system. So while the road has made it easier for farmers to get their
produce to market, it has made it harder to grow that produce in the
first place.

Shuja Ahmed is an Afghan-American businessman from Arizona who
travels to UN-funded roads and mediates between the contractors and
communities. He usually has a local counterpart who keeps abreast of
the issues, and in Shiberghan, it's soft-spoken, serious Amanullah.
Together, they survey the areas where complaints were filed and see if
the changes that the people had requested have been made.

Ahmed and Amanullah mediate between Berger and Limak and the
local farmers. Because the road is guaranteed for a year against
defects, Limak, with the advice of The Berger Group, agreed to build 63
new concrete culverts, better than what the farmers had before. When
the new culverts proved too small to accommodate the necessary water
flow, the contractors built additional ones next to them (and billed
for it). Limak and the Berger Group point to this as a moment of
altruism, as opposed to poor advance planning.

Some consider the Afghan road laborers the unlucky ones. They
are sometimes paid  as little as 10 percent as much as non-Afghans for
the same job and are excluded from nearly all benefits. Contractors are
obligated by Afghan law to maintain a labor force that is at least 50
percent Afghan. Hiring more Afghans saves foreign companies more in
overhead, which means bigger profits. Limak, the Turkish subcontractor,
hired 750 workers during the peak construction period on the Shiberghan
highway-250 were Turkish, mainly supervisors, and 500 were local
Afghans. The Afghan laborers work seven days a week, 10 hours a day for
$90 a month. Limak provides  transportation and lunch. They have no
health insurance or workers' compensation. The Turks and other
foreigners on the project are fully insured, and the Turks receive no
less than $1,000 a month.37 The expatriates live in the
camp, where they have the benefits of running water, electricity, and
three meals a day. The foreign engineers and supervisors work similar
hours-there is not much else to do on the campsite. The contractors say
they cannot attract qualified expatriate workers if they do not provide
them with basic services and good salaries.

Afghan laborers say that while they understand they are paid
less if they have fewer skills, they don't understand why the
difference is so great, especially when the cost of living in
Afghanistan is rising rapidly as reconstruction moves forward. "They do
not see us as having the same worth and that's the real reason. We do
not have the unions and the organizations to demand more,"38
said one Afghan engineer on the site. The inequity breeds contempt and
tension: Expatriates can only leave the camp site with an armed guard.

Two days before I arrived at the highway construction site,
Mohammed Nasim, an Afghan road laborer, was leaving work when a
speeding driver hit and injured him on the highway. Limak officials
took him to the local hospital and arranged for him to be airlifted to
Kabul, but he died on the way. Nasim's colleagues in the camp bought
food for his wife and children but the company has no plans of
providing monetary compensation to his family, which has lost its
provider.

Between 2002 and 2005, 80 people-about 18 expatriates and the
remainder Afghans-were killed working on Berger-supervised projects.39

POLITICS BEFORE PROGRESS



Perhaps the most visible success story in the reconstruction of
Afghanistan's infrastructure has been the 482-kilometer (300-mile)
Kabul to Kandahar highway. A wide, black, flat expanse of asphalt with
45 bridges and 1,900 culverts and causeways, it is a tangible if
incongruous example of progress. It took two years for the Berger Group
to complete its contracted 389 kilometers (242 miles), but the peak
building period was done in record time-about six months-and that was
no accident.40 Besides the fact that the United States military needed
a primary road to shuttle troops and supplies from one region to
another, the completion of this highway had political significance in
both Afghanistan and the United States. The Afghan presidential
elections were to be held in October 2004, and United States President
George W. Bush was in a close race for reelection to be decided less
than a month later. Both campaigns could use the good press.

American Ambassador Zalmay Khalilzad initiated an accelerated
reconstruction program that demanded what some development experts
called "ridiculous" time frames for building and refurbishing roads,
schools and clinics. USAID awarded Berger the contract to build the
highway in late 2002, and gave it a strict deadline. In the peak work
period, 3,000 Afghan laborers receiving $5 to $10 a day worked seven
days a week in 12-hour shifts to get it done before both the Afghan and
American presidential elections in 2004.41 The road is meant
to be a symbol more than anything, of American determination, of
Afghanistan's future viability as a trade corridor, and of the
legitimacy of the new Afghan government.

The project is perhaps the largest feather in The Louis Berger
Group's cap. Already, Berger had successfully managed Afghanistan's
currency transition, which was meant to strengthen and stabilize the
Afghani to make foreign investment in the nation easier. Before the
switch-over, it was 40,000 Afghanis to the U.S. dollar. Today it is
50-to-one. The new notes also got a facelift, and resemble the United
Arab Emirates' dirham. But it is the Kabul-to-Kandahar highway that
gets most of the attention.

In the Washington, DC offices of the Berger Group, the scissors
that Karzai used to cut the road's inaugural ribbon are displayed next
to a photo of the event. The road cost $256 million including payments
to five subcontractors, plus 1,000 Afghan troopers to protect the
project from sabotage. The road ended up costing $640,000 per kilometer
(or about $1.02 million per mile). Berger engineers say the bill was
low considering the dire conditions they worked under and the speed
required. 42

Critics, however, say that quality was sacrificed for speed in
the name of political expedience and profit. Some claim the highway is
not thick enough to withstand the harsh weather conditions, including
icy winters and 120-plus degree heat in summer months; indeed, the
highway surface suffered deep cracks during the first winter. It lacks
a median to prevent head-on collisions. Sources involved who asked not
to be identified have said that Berger engineers were aware that the
substances tested in its labs for the road were inadequate to handle
expected traffic flow, but still used the material.43 Berger officials deny the charge.

Berger repaired the cracked asphalt under the one-year warranty
and has extended the warranty until spring 2006, but any future damage
will be the Afghanistan government's responsibility. This kind of
long-term maintenance has not been provided for most of the
reconstruction contracts. Chace, deputy program manager of operations
for Berger, said maintenance will be the long-term challenge of
reconstruction for Afghans. The international community may build, but
they're not here to make sure that whatever they build lasts, he said.44
Some USAID money is allocated to Berger to train Afghans by working
side-by-side with them, but time and money are generally not in great
enough supply to turn out enough skilled Afghans to match the task of
maintaining all of the new construction, Chace said.

"Capacity building and accelerated programs are a
contradiction," Chace said in his office in Kabul. He concedes that if
Berger had more time and money, it would have trained more Afghans to
do the job themselves.45

A third highway, the Kabul to Gardez road, which was handed over
to the government in November and will be completed in spring 2006, is
another Berger project that has raised eyebrows.  Berger and its
Turkish subcontractor, Cukurova, entered into a business contract with
a local militia commander (characterized by some as a warlord) known as
the King of the Kuchis (nomads). For a price, the commander's company
would supply construction equipment, including dump trucks, to the
crews building the road. At some point during the project, negotiations
soured between the two companies and the commander, and he made threats
to kidnap Cukurova's employees. The company paid the commander off to
the tune of $40,000.46 Berger sources insist that the money Cukurova paid had not come from USAID funds.

BAD SCHOOLS AND BROKEN CLINICS

The Berger Group has trained farmers, built roads and hospitals,
and consulted with nations around the world on infrastructure
improvements, but nothing prepared it for the magnitude of work it was
given in Afghanistan. If the roads project could be claimed as a modest
success, Berger's work to build and refurbish schools and medical
clinics with USAID funds was unmitigated disaster. But in all fairness,
it wasn't entirely Berger's fault. As with the Kabul-Kandahar highway,
pressure before closely watched elections from the U.S. and Afghan
governments to show tangible examples of progress for visiting
dignitaries press weighed on USAID, which then leaned on contractors
to  work fast. The cost of speed can be seen in brand-new yet crumbling
clinics and damaged schools.





USAID kept changing Berger's contract for the schools and clinics
program. At first, USAID told its contractors, including Berger, to
build and repair 1,000 clinics and schools in two short  years. But
after realizing the challenges, the U.S. began to lower expectations.
Berger's responsibility was reduced from 135 structures to 106, but the
contractor still had troubles meeting its quota.47 Thirteen
of the schools and clinics were cancelled because of violence in the
areas where they were to be built. The rest are completed except for
one clinic and training center, but along the way it was a comedy of
errors.

At least two school roofs on Berger buildings were damaged after the first winter snow in the province of Ghazni.48
At an extra cost of millions of dollars, the company replaced 22 and
fortified 67 clinic and school roofs across the country because the
damage exposed critical design flaws. The planned earthquake-safe roof
trusses were too heavy for local labor to place on the building without
a crane, Afghan engineers said. The cranes could not be transported
because of difficult terrain in some parts of the country. Therefore,
Berger introduced new, lightweight steel trusses that, it turned out,
may have been earthquake-safe, but were not strong enough to withstand
the standard accumulation of snow in an Afghan winter. Berger blamed it
on its subcontractor for shoddy construction and low quality steel.49 When
parents of schoolchildren in the region began asking questions, Berger
blamed the local government, suggesting that if someone had just
cleaned the snow off the roofs, they would not have collapsed.50

Baz Mohammed Baz, the head of the construction department at the
education ministry responsible for schools, said Afghan engineers had
advised against the sheet metal roofs but no one listened. "During the
planning process, we stopped working with them. USAID gives the money
and they do the monitoring. We're not even recognized," he said. Except
when there's blame to be assigned.51

Baz said the American contractors spent too much money on overhead and
other expenses. He said they should learn from the Japanese contractors
who consult the government and build solid structures that last. A new
school with 12 classrooms costs the Japanese from $90,000 to $100,000,
Baz said.  Berger's average was nearly $274,000 for that many
classrooms.52

Sources inside USAID concede that Berger was overwhelmed and
that, in hindsight, the tasks should have been divided among several
contractors instead of given to one. But USAID was under intense
pressure to implement its "accelerated program." A Berger official said
that at one point, the company told USAID that it would be impossible
to build quality structures so quickly under the conditions.53
But delays were also caused by poor planning, severe weather, and the
fact that the construction  in some regions was occurring in an active
war zone.

According to the GAO audit, USAID designated building sites in places that it had never seen.54 Contractors were told to build on places such as a desolate mountainside, on top of a graveyard, and in a floodplain.55
A former Berger employee said that monitors could not even locate some
school and clinic sites, and when they did it, was too dangerous to
stay long enough to make a reasonable assessment.56 In 2005,
Berger sent out a team of Americans to monitor a site where a
subcontractor was building a school in Kandahar. Insurgents ambushed
their helicopter as it was leaving. One passenger died, and
another-Suzanne Wheeler, a construction engineer from Texas-was shot
three times in the stomach and once in the leg.

'A MAFIA SYSTEM'

Ramazan Bachardost, a populist member of Afghan parliament who ran on an anti-foreign-corporation, anti-corruption campaign, has been on a crusade against the contractors and NGOs-at times employing questionable accusations. As the planning minister in fall 2004, he tried to shut down more than 1,000 NGOs, claiming they were breaking the law and stealing money. Karzai stopped him from dissolving the NGOs and in reaction, Bachardost, a French-educated law professor, resigned. Yet his complaints have struck a chord with Afghans-he received the third highest number of votes in parliamentary elections in Kabul and holds frequent press conferences in an effort to expose corruption. In his campaign tent in the middle of a park in Kabul, Bachardost said that evidence of corruption by foreign contractors includes overspending taxpayers' funds, delaying reconstruction, and using government contacts to win bids. He said many foreign contractors do not have the skills and experience for the required tasks. "The system that is in place here is a mafia system. There's no transparency, accountability,[with] cash only received and used. There has been a community of contractors and the criteria is not economics; it's about who you know."60


Wheeler, in a phone interview from Texas, said a lack of
qualified laborers and reliable subcontractors accounts for bad quality.57
Wheeler was in Kandahar the day she was shot only to check up on a
subcontractor who had apparently abandoned the job.  Chace said such
in-person monitoring wasn't initially planned or provided for by USAID,
but  because of the underskilled workforce, has become necessary to
ensure structures are built to code.58 While Berger's
contract requires it to meet American seismic and construction codes,
USAID initially did not have adequate staff to do quality assurance.
Later, USAID hired International Development and Relief, Inc., another
U.S. company, to monitor the agency's contractors.

Berger's Chace responded to the criticism in an email: "Louis
Berger, USAID and all of the other implementing partners in the REFS
[Rehabilitation of Economic Facilities and Services] program have had
to face and overcome numerous challenges since the start of the
reconstruction effort. The earlier works were all accelerated to be
able to show the Afghan people some immediate results and evidence that
the intent of the program was honorable and noble. Many people have and
continue to work very hard to achieve the goals that have been
established for reconstruction. On a program of this magnitude there
will be problems; even if it was being implemented in a developed
country. The challenges in Afghanistan make it even more difficult.
There will be disagreements and mistakes made by anybody at any given
time. However, you overcome those problems and you keep the objectives
in mind and move forward."59

A Crushing Blow

CorpWatch focused on The Louis Berger Group not because it is
the most corrupt or the least effective, but because its contract may
be the broadest and heftiest of any granted to any firm from anywhere
in the world for reconstruction in Afghanistan. But when it comes to
the most tragic reconstruction failure, the dishonor goes to a Chinese
company called China National Complete Plant Import and Export
Corporation that was contracted to rehabilitate a wing of one of
Kabul's most prestigious hospitals.

The hospital had been damaged by war and earthquakes, and one
wing desperately needed to be retrofitted. The Chinese government
earmarked $14 million in aid to Afghanistan for the hospital
refurbishment. Sources close to the project say the company had not
been chosen for its competence, but rather for its close ties to the
Chinese ambassador in Kabul.61

 

On a hot and dusty Monday on July 26, 2004, the hospital wing
collapsed. Under the rubble, 13 Afghan laborers died. Forklifts dug in
the rubble in search of bodies. Families sat outside, mothers cried for
their sons, hoping they would be found alive.62 Dozens were injured. It
took five days for rescue workers from the U.S. embassy, local
authorities, and the international peacekeepers to find all the bodies.

Dr. Ahmad Shah Shokohmand, chief of hospitals at the health
ministry, was a witness to the destruction. "My tears were falling to
see that one of the most well-known hospitals in my country was causing
deaths instead of saving lives. I learned everything I know there. I
saw a mother wait from morning until midnight for three days until
three of her sons were found. They were all dead," he said.63

Officials at the Afghan health ministry complained to the foreign
ministry that the Chinese company was using poor materials and bad
workmanship. "They were using huge Chinese-made stones six times
thicker than the original marble stone," said one engineer. "I knew the
building would collapse."64

The Chinese company said an earthquake days before the tragedy was the real cause.65

After the collapse, the Chinese sent an investigative team to
probe the collapse. Four Afghan government offices, including the
health ministry, and the International Security Assistance Force-the
peacekeepers-conducted separate inquiries. After months, reports were
produced-none of which were made public or available to CorpWatch. But
the Chinese government told the health ministry that they would
compensate the families of the deceased victims $10,000 each.66 The
same Chinese company was hired to clean up the mess and rebuild the
wing and additional parts of the hospital.

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