Wednesday, February 10, 2010

Quickie: Iraq Lessons Ignored at Kabul Power Plant

This one via IPS:  A diesel-fueled power plant, nearing completion just outside Kabul, demonstrates that the U.S. Agency for International Development (USAID) and its contractors have failed to learn lessons from identical mistakes in Iraq, despite clearly signposted advice from oversight agencies. (See AFGHANISTAN: Iraq Lessons Ignored at Kabul Power Plant by Pratap Chatterjee). Excerpt below:   

In May 2007, USAID signed an agreement with the Afghan government to build a 105 megawatt plant at Tarakhil, just a couple of kilometres from the Kabul airport. The contract was awarded to a joint venture of Louis Berger, a construction company from New Jersey, and Black & Veatch, another construction company from Kansas.

This venture was guaranteed a profit based on the amount of money spent to complete the project (known as cost-plus contracting).

Black & Veatch sub-contracted on a fixed price basis to Symbion Power from Washington DC, which has completed six fixed-price projects for the U.S. government in some of Iraq's most conflicted areas in the last four years, including two 400 kilovolt transmission lines from Haditha in Anbar province to Al Qaim near the Syrian border and to Baiji in northern Iraq.
Typically the cost of building a diesel plant in the Middle East and Asia is about one million dollars per megawatt or less. For example, Wartsila, a Finnish company, is completing a 200-megawatt project in neighbouring Pakistan for 180 million dollars.

In fact, some says they can do it for less. "I built a 22-megawatt plant in Kandahar (in 2008) for 550,000 dollars a megawatt," says Abdul Ghaffar, an Afghan engineer who runs his own power plant construction company in Dubai.

By the time the project started, the price tag for the fast-track turbines and multiple layers of contractors was 259 million dollars, two-and-a-half times that of similar projects.
Nine months later, some 60 percent of the project was complete. By this time, the 260-million-dollar price tag was looking unrealistic - it would eventually exceed 300 million dollars.
In March 2007, two months before USAID signed an agreement with the Afghan government to build the power plant, the Special Inspector General for Iraq Reconstruction (SIGIR) released its final report on programme and project management during the U.S.-led reconstruction mission in Iraq that specifically pointed out the perils of poor planning and supervision.

In fact, a January 2006 report by SIGIR faulted U.S. government planners and some of the very same contractors - namely Black & Veatch - for supplying turbines to a combined cycle gas turbine facility at Qudas outside of Baghdad that were unsuitable for the available fuel supply in Iraq, and for failing to provide adequate training and maintenance for the plant.

Thus it may seem ironic that on Jan. 20, 2010, exactly four years later, an audit of the Tarakhil power plant conducted by the Special Inspector General for Afghanistan Reconstruction (SIGAR) would question the wisdom of building a diesel and heavy fuel plant that has a "technically sophisticated fueling operation that [the Afghans] may not have the capacity to sustain."

The report also noted that 40 million dollars of the cost escalation was "directly linked to project delays."

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