U.S.-Funded Afghan Hospital Charged With Overspending On Fuel At $500 Per Gallon

An Afghan policeman watches trucks driving on the highway 7, route between Pakistan and Afghanistan, next to a petrol station
An Afghan policeman watches trucks driving on the highway 7, route between Pakistan and Afghanistan, next to a petrol station in Surobi province on January 22, 2011. AFP PHOTO/JOEL SAGET (Photo credit should read JOEL SAGET/AFP/Getty Images)

A US-funded project to build a hospital in Afghanistan paid $500 a gallon for fuel instead of a market rate of $5, a watchdog said Wednesday in a damning report into overspending and waste.

The Special Inspector General for Afghanistan Reconstruction (SIGAR) said that construction of the 100-bed hospital in Gardez, Paktiya province, was 23 months behind schedule.

It accused USAID's implementing partner, the International Organization for Migration (IOM), of "weak internal controls" that led to overpayments of at least $507,000.

"IOM paid the contractor $300,000 for 600 gallons of diesel fuel -- a cost of $500 per gallon. According to IOM officials, the market price in Afghanistan for diesel fuel should not exceed $5.00 per gallon," the SIGAR report said.

"IOM (also) paid $220,000 for an automatic temperature control device that should have cost between $2,000 and $10,000.

"IOM could not provide us with a vendor invoice for either of these payments," it added. "USAID did not discover the overpayments and reimbursed IOM for these unwarranted costs."

SIGAR, which has issued a string of highly critical assessments of US reconstruction projects in Afghanistan, recommended that USAID should seek to recover the cash from IOM.

The watchdog said that USAID had responded to its draft report by agreeing to conduct an audit to determine whether overpayments were made.

Richard Danziger, IOM's chief of mission for Afghanistan, said it denied any overpayments and expected to be cleared by the audit.

"We will cooperate with the audit and are confident that any allegations will be proved to be incorrect," Danziger told AFP, adding that the delays in construction were due to the hostile environment in Gardez.

The SIGAR report will raise further worries about wastage of the billions of dollars of international aid spent in a country that is set to rely on donor funding for years as it battles a resilient Taliban insurgency.

In July, SIGAR criticised USAID for spending nearly $50 million on programmes which had failed to strengthen Afghan local government or improve stability,

It has also said the US was not properly monitoring a programme to train judges and lawyers, and was spending $771 million on aircraft for Afghanistan in a project that was at risk in part due to a lack of literate recruits.

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