– $500 per gallon for gas – Sticker shock from war spending waste (CNN, Oct 23, 2013):
500 for a gallon of fuel?That was the exorbitant figure paid with U.S. tax dollars to a contractor building a hospital in rural Afghanistan, according to a report from the government watchdog tasked with investigating expenditures on Afghanistan’s reconstruction.
In the report from the Special Inspector General for Afghanistan Reconstruction (SIGAR), the International Organization for Migration was found to lack sufficient internal controls able to detect overpayments of at least $507,000 to the contractor it hired to build a 100-bed hospital in the town of Gardez.
It was part of a project begun in July 2008 in a cooperative agreement between the United States International Agency for Development and IOM.
The examples of oversight ineptitude are staggering.
The inspector general found one case where IOM paid the contractor, Sayed Bilal Sadath Construction Company, $300,000 for 600 gallons of diesel fuel – a cost of $500 per gallon.
In another instance, IOM was found to have paid $220,000 for an automatic temperature control device that the audit said should have cost between $2,000 and $10,000.
“IOM officials did not identify either of these discrepancies when making payments to SBSCC,” the report said. “In addition, USAID never identified the overpayments and reimbursed IOM for these payments made to SBSCC.”
Almost two years past the original completion date, the construction firm has requested six extensions to the contract according to the report.
While USAID maintains construction has been significantly hampered by its remote location in an area rife with insurgency, the agency has granted IOM an extension to complete the project by the end of the year.
Funded through a project to increase the capacity and access to healthcare facilities Afghanistan, the hospital is supposed to replace an existing 70-bed hospital in Gardez.
The inspector general found that the new hospital’s annual operating budget and maintenance costs could exceed by five times the costs of the current hospital – a figure unlikely to be sustained by the Afghan government.
In a letter to Rajiv Shah, the administrator of USAID, and William Hammink, USAID’s Mission Director in Afghanistan, John Sopko, who runs SIGAR, commended USAID’s intent to conduct an audit to determine whether there were additional contractor overpayments that needed to be returned to the U.S. government.
Sopko also recommended USAID seek reimbursement from IOM of the identified overpayments in diesel fuel and temperature control devices.
The year-long inspector general audit ended this past September.