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Published: Thursday May 15, 2014 MYT 5:00:03 AM
Updated: Thursday May 15, 2014 MYT 5:01:39 AM

U.S. reconstruction push overwhelming Kabul's finances -watchdog

WASHINGTON (Reuters) - The United States has spent $103 billion on rebuilding everything from hospitals to security forces in Afghanistan, but Kabul's modest finances make it unlikely the projects could be maintained in the future, a top U.S. watchdog said on Wednesday.

John Sopko, the special inspector general for Afghanistan reconstruction, said even with the U.S. war effort winding down, U.S. spending in the country is likely to continue at a pace of $6 billion to $10 billion a year. He said $18 billion has been appropriated for Afghan projects and not yet spent.

Sopko, in prepared remarks for the Middle East Institute think tank, said U.S. funding for Afghan reconstruction has topped the amount spent rebuilding Britain or Germany following World War Two. Annual payments are more than what Washington gives to Israel, Egypt and Pakistan combined, he said.

The result is that the government of Afghanistan, one of the world's poorest countries, needs an annual budget of about $7.6 billion, but is able to raise only about $2 billion from its people. Without contributions from donor countries, it will not be able to make up the shortfall, Sopko said.

Sopko said at assessment by the Center for Naval Analysis concluded the Afghan National Security Forces would need 373,000 personnel, significantly more than currently planned. That would cost between $5 billion and $6 billion annually, up to three times Kabul's revenues.

"Each new development project that the U.S. and other international donors fund increases overall operation and maintenance costs, adding pressure to Afghanistan's operating budget," Sopko said.

A key lesson from Afghanistan, he said, is "reconstruction projects must take into account the recipient country's ability to operate and sustain the assistance we provide."

He pointed to the 105-megawatt Kabul Power Plant as an example. The Afghan government promised to commercialize its operations to cover fuel costs, but a 2010 audit found it had not done so and would likely need foreign assistance to maintain, operate and fuel it for several years.

"It is questionable whether the Afghan entities charged with financing these projects can afford them," Sopko said.

As American troops withdraw from Afghanistan, the security situation in the country will make it increasingly difficult for inspectors to ensure U.S.-funded projects are properly completed and monies effectively spent, Sopko said. Inspectors believe no more than 20 percent of the country will be accessible to them.

He urged the government to "have the courage to risk saying 'no' to the Afghans if adequate safeguards cannot be implemented" to ensure inspectors have access to project sites.

Sopko cited a U.S.-built hospital in Parwan Province as an example of what can go wrong without oversight.

"The water, sewer, electrical and heating systems were incomplete and in need of repairs," he said. "There was no clean water. Newborn babies were being washed in river water. ... The hospital lacked some of the most basic necessities."

(Reporting by David Alexander; Editing by Mohammad Zargham)

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