Nearly two years ago, Afghan President Hamid Karzai ordered that gun-toting private security companies in his country be brought under state control. But the Afghan force to replace the foreign-funded contractors is off to a rocky start.
According to the U.S. Special Inspector General for Afghan Reconstruction (SIGAR), the new force will increase security costs for USAID projects and could even shut some of them down, at a loss of about $899 million. USAID in Kabul disagrees, and the dispute has gone public.
For many years, supply convoys and warehouses in Afghanistan had private security companies guarding them. But resentment grew, and the image of burly foreigners stopping traffic and blocking off roads became a political issue for Karzai. The private armies ended last month with the creation of the Afghan Public Protection Force, known as the APPF.
"According to our policies and calculations, the APPF cannot fail," says Sediq Sediqi, spokesman for the Afghan Interior Ministry.
He explains that the APPF is a state-owned enterprise — an Afghan state security company to replace all of the security contractors in the country, which the Afghan government has long condemned as costly and corrupt.
But that would imply that the APPF is going to be less costly and less corrupt.
"As a result of the switchover to an Afghan Public Protection Force, there would be an increase in the cost of an Afghan laborer," says Benjamin Piccolo, an assistant inspector general at SIGAR. "His could be as much as 46 percent based on our analysis."
SIGAR sent out an urgent warning this spring that U.S. Agency for International Development projects were at risk, expressing concerns that the guards were poorly trained and equipped.
Ken Yamashita, director of USAID in Afghanistan, says SIGAR's information was outdated.
"Our point was, if you're going to come to these conclusions, then you really need to look at updated information, and we felt that in the final report, they chose not to."
Yamashita says the process of setting up the APPF was complicated and is still a work in progress, but he says no projects so far are in danger of closing. He estimates an initial cost increase closer to 16 percent.
Both sides stand by their estimates — and their dispute continues — even after a congressional hearing in Washington. U.S. lawmakers raised questions about why Americans' taxes are paying a for-profit, Afghan state-owned enterprise to protect the reconstruction projects that are also paid for by American taxes — especially because the APPF has levied an across-the-board profit margin.
"As part of their cost, they are applying a 20 percent profit on top of the overhead charges." Piccolo says. "We don't have a position whether that is an appropriate amount. But we did want to make sure that everybody understood that this was part of the reason that the costs were going to be higher with the APPF."
The Afghan government's reputation for corruption did lead one congressman to wonder if that 20 percent was going right into the Karzai family's personal account.
Yamashita says USAID can keep a close watch on contracts for signs of graft. But the bottom line is that Karzai has ordered the creation of the APPF as part of the transition to Afghan sovereignty, and Yamashita says that leaves the U.S. only one option.
"If you are working in Afghanistan, and if you need a security guard force, then APPF is the only way to go," he says.
Yamashita says if the APPF can't do the job, USAID can ultimately cut its losses and cancel the reconstruction projects.
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