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DoD Pays Premium for Gas Station in Afghanistan

The Department of Defense (DoD) spent nearly $43 million to build a gas station in Afghanistan that should have cost no more than $500,000 according to a new report by the Special Inspector General for Afghanistan Reconstruction (SIGAR). Additionally, DoD is unable—or unwilling—to provide a justification for its decision.

DoD’s Task Force for Business and Stability Operations spent $42.7 million between 2011 and 2014 to construct a compressed natural gas (CNG) automobile filling station in Sheberghan, Afghanistan. (You may recall Sheberghan as the site of an unfinished, hazard-filled teacher training facility built by the U.S. Army Corps of Engineers that we blogged about two years ago.) The station includes two dispensers/four hoses, one CNG trailer filling point, a car conversion center, an administrative office building, and gas compression and processing equipment. It is currently being operated by a private company, Qashqari Oil and Gas Services.

SIGAR determined that the project should have only cost between $200,000 and $500,000. That means we taxpayers overpaid by as much as 10,750 percent. Incredibly, overhead costs accounted for about 70 percent ($30 million) of total project expenditures, according to the report.

According to SIGAR, the Task Force had neither considered the feasibility of the station nor the “potentially considerable obstacles to the project’s success” prior to starting construction. The report forecasts a bleak future for the station: the area lacks the infrastructure needed to transmit and distribute natural gas, and the cost of converting gasoline-powered cars to run on CNG is prohibitively expensive for average Afghanis.

DoD did not provide SIGAR with an explanation for the exorbitant cost or answer other questions concerning the project. Principal Deputy Under Secretary of Defense Brian P. McKeon told SIGAR that the March 2015 closure of the Task Force resulted in his office “no longer possessing the personnel expertise to address these questions.”

McKeon’s statement particularly rankled Special Inspector General John F. Sopko. “Frankly, I find it both shocking and incredible that DOD asserts that it no longer has any knowledge about TFBSO [the Task Force], an $800 million program that reported directly to the Office of the Secretary of Defense and only shut down a little over six months ago,” he wrote to Secretary of Defense Ashton Carter. The report calls McKeon’s claim of ignorance “unconvincing” and accuses DoD of hindering SIGAR’s investigation. Apparently, the contentious, counter-productive relationship between SIGAR and the Pentagon that we’ve blogged about before hasn’t improved.

SIGAR plans to issue additional reports on the Task Force’s activities and spending in Afghanistan. As for the gas station boondoggle, Sopko promises “to shed additional light on how this program operated, what it achieved, how this enormous amount of money was spent,” and, most ominously, “whether any conduct by TFBSO staff or contractors was criminal in nature.”