The U.S. military has wasted at least $54 million in Afghanistan on projects to develop the country’s oil, gas and minerals industries that didn’t yield any significant successes, according to a report released Thursday.
The Pentagon has spent $488 million since 2009 to help Afghans take advantage of the wealth of natural resources in their country that could generate revenue for the government. But the efforts have showed limited progress overall, according to an audit by the Special Inspector General for Afghanistan Reconstruction.
While programs run by the Defense Department’s Task Force for Business and Stability Operations and U.S. Agency for International Development did yield some successes, the report found that more than 10 percent of the overall investment was spent on projects that achieved “few – if any – project objectives.”
The inspector general reviewed the 11 extractives projects worth a total of $215.4 million. Three of the projects showed “little to no” achievement, and five projects only partially met their goals.
The task force came under fire last year for spending $150 million to house employees in plush villas instead of military facilities in Afghanistan and $43 million on a gas station in Afghanistan when a comparable structure in Pakistan cost less than $500,000.
The Senate Armed Services Committee is planning to investigate the Pentagon’s wasteful spending in Afghanistan during a hearing next week. Brian McKeon, the principle deputy undersecretary of defense for policy, and Jon Sopko, the special inspector general for Afghanistan reconstruction, are expected to testify.
The special IG also reviewed two of three programs run by USAID to develop and regulate Afghanistan’s extractives industry and found that they did not meet four of the 11 goals for fiscal 2014. A program to provide training and technical assistance to those working in Afghanistan’s hydrocarbon industry abandoned six of its 24 objectives.
Afghanistan has more than $1 trillion of natural resources, including mineral, oil and natural gas reserves, that could generate about $2 billion a year in revenue for the Afghan government, according to U.S. estimates.
One of the biggest obstacles to success in Afghanistan’s ability to generate revenue from its resources is corruption within the country. Because of the corrupt and inefficient process to register mines, many operate illegally.
The report estimates that 1,400 mines operate illegally around Afghanistan, while only 300 are licensed and pay taxes.
A lack of infrastructure also contributes to problems in Afghanistan. Roads that are not accessible to vehicles or are only drivable part of the year make it difficult to deliver equipment to mining sites, the report said.
In addition, a dangerous security situation in Afghanistan makes it difficult to harvest resources in areas not under government control or places that are still dotted with land mines and unexploded ordnance that will need to be cleared.
The report recommends that the USAID administrator develop a plan with the Afghan government for structural reforms at the mining ministry and not provide the government any more funding until those reforms reach pre-determined milestones. USAID agreed with the recommendations, saying that its plan with the Afghan government is expected to be completed by March 31 and that it does not plan to provide any on-budget funding beyond its current programming.
The report did not make any recommendations to the Defense Department since the task force’s mission in Afghanistan ended in December 2014.
