The most governmenty government operation ever: The $43 million Afghan gas station; Update: Debunked

Update, 1/17/18: It’s been more than two years, but this still requires a retraction. NBC News apparently got this one wrong, and so did a lot of other people, according to Jeff Goodson at The Hill. The gas station cost $5 million, not $43 million, and Goodson has been trying ever since to stamp out the false report:


More notable is audit data showing that the narrative Sopko concocted in July 2015 — alleging that TFBSO spent $43 million on a prototype natural gas fueling station — was pure hokum. It was clear from the start that the $43 million number was wildly off base. SIGAR itself reported to Congress just six months earlier that the station cost only $5 million. I called Sopko out on it at the time, and so did Politico and the Washington Post. When the Senate Armed Services Committee demanded an explanation, Sopko blamed the Defense Department.

But Sopko didn’t stop using the number. Instead, he doubled down and kept ballyhooing the $43 million myth to any audience that would listen. Scores of media outlets did, and eagerly repeated it — from Al Jazeeraand MSNBC, to Fox News and Stars and Stripes. He also used it as a recurring punch line in interviews and speeches, including to Defense News, the Associated PressNBC NewsBrown UniversitySyracuseDukeand others.

Now, after two years of hyping the $43 million soundbite, SIGAR’s own audit confirms what SIGAR knew in 2014: that the actual cost of the gas station was just $5.06 million.

I missed the counter-reports at the time, so I certainly apologize for letting it go as long as I did without a correction. I also apologize for not being more skeptical about this report, even though similar reports appeared in other media outlets. When something sounds too good or too bad to be true, odds are that it’s not. Lesson learned.


Original post follows …

Ridiculously overbudget? Check. Unnecessary? Check. Impossible to support in the long run? Check. Zero accountability? Check and double-check. If a novelist wrote this as a satire of government operations, there wouldn’t be an editor who’d buy it — not for 43 cents, and certainly not for $43 million:

Nearly $43 million of U.S. taxpayers’ money was spent on building a gas station in Afghanistan — 140 times more than it should have cost, according to a government watchdog.

The Special Inspector General for Afghanistan Reconstruction (SIGAR) also said that one of the most “troubling” issues is how the Department of Defense was unable or unwilling to explain why the “ill-conceived” project was so expensive.

“Even considering security costs associated with construction and operation in Afghanistan, this level of expenditure appears gratuitous and extreme,” SIGAR said in a report issued Monday. …

“It’s an outrageous waste of money that raises suspicions that there is something more there than just stupidity,” John Sopko, the special inspector general, told NBC News. “There may be fraud. There may be corruption. But I cannot currently find out more about this because of the lack of cooperation.”

Stupidity hardly covers it. I’ve worked on capital projects that ran over budget because of errors, but we’re talking in the 5% range. A 10% overrun in the private sector will get you noticed in all the wrong ways, and anything over that will likely get you fired. This is an overrun of, oh, 14,000%.


And because this is truly a government operation, no one knows anything about it. IG John Sopko went looking for answers, and came up empty — because the project office has already been closed down:

One of the most troubling aspects of this project is that the Department of Defense claims that it is unable to provide an explanation for the high cost of the project or to answer any other questions concerning its planning, implementation, or outcome. In fact, in response to my request for information, the Principal Deputy Under Secretary for Policy stated in June 2015 that the March 2015 closure of TFBSO resulted in the Office of the Secretary “no longer possessing the personnel expertise to address these questions or to assess properly the TFBSO information and documentation retained by WHS in the OSD Executive Archive” (see Appendix I).

In written comments on a draft of this report, the Principal Under Secretary of Defense for Policy did not dispute our facts or findings, or provide any new information. Instead, his comments reiterated his earlier position that because TFBSO closed in March 2015, the Department no longer has the expertise to answer any of SIGAR’s questions about this project or about any other TFBSO activities (see Appendix II).

Frankly, I find it both shocking and incredible that DOD asserts that it no longer has any knowledge about TFBSO, 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.


Even more stupidly, the DoD built this as a compressed natural gas refueling station for commercial and personal vehicles. Afghanistan has a mostly untapped wealth of natural gas, and the US wants to push the clean-burning fuel rather than petroleum-based fuel. That sounds great, except that Afghanistan doesn’t have a wealth of CNG-fueled vehicles, nor much wealth for Afghans to either convert their vehicles or buy new vehicles to replace them.

As Sopko discovered, no one apparently thought to look into that problem before sinking $43 million into the gas station:

SIGAR’s May 2015 inquiry letter to DOD requested copies of any feasibility study conducted prior to building the CNG station, but DOD was unable to provide any such document. This is consistent with what SIGAR learned in the field: an engineer working for USAID on CNG projects in Afghanistan told SIGAR that TFBSO did not regularly conduct feasibility studies for their projects.

If TFBSO had conducted a feasibility study of the project, the Task Force might have noted that Afghanistan lacks the natural gas transmission and local distribution infrastructure necessary to support a viable market for CNG vehicles. …

Even if Mazar-e-Sharif were to obtain a reliable supply of natural gas, there is no way to deliver it to small consumers, such as filling stations. Mazar-e-Sharif’s local distribution network is currently defunct and a USAID study estimates that it would cost $50 million to rehabilitate it.

Finally, it appears that the cost of converting a gasoline-powered car to run on CNG may be prohibitive for the average Afghan. TFBSO’s contractor, CADG, states that conversion to CNG costs $700 per car; other sources estimate that it costs up to $800. According to the World Bank, the average annual income in Afghanistan is $690. This may explain why the U.S. Government paid for the conversion of over 120 Afghan vehicles to CNG so that they could use the filling station: ordinary Afghans simply couldn’t afford to do it. Not surprisingly, SIGAR found no evidence that any other vehicles were converted to CNG.

In sum, it is not clear why TFBSO believed the CNG filling station project should be undertaken. In the absence of national or even regional natural gas transmission and local distribution infrastructure to support a network of CNG stations, there is no incentive for motorists to convert their vehicles to CNG. In fact, an economic impact assessment performed at the request of TFBSO found that the CNG filling station project produced no discernable macroeconomic gains and a discounted net loss of $31 million.


With all this in mind, let’s ask the real question in this scandal: where did the $43 million go? It didn’t go into the gas station itself, clearly. This appears to be a slush fund used to channel cash into the hands of cronies in Afghanistan, with a useless gas station built as a cover for it. Sopko certainly seems to suspect that something is up with all of the shoulder shrugging at the DoD, especially given the ridiculous notion of the project itself.

There is an axiom which states that one should never suspect a conspiracy when stupidity provides just as good of an explanation. This case, however, requires so much abject stupidity that it’s difficult to credit all on its own. As Sopko told NBC, the project “raises suspicions that there is something more there than just stupidity.” And this is coming from an expert on government stupidity.

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