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Funds for roads end up in private pockets

Funds for roads end up in private pockets

Jul 20, 2013 - 09:14

KABULinfo-icon (PANinfo-icon/IMCP): Only a fraction of Kabul’s streets are paved properly. The vast majority of roads appears much like potholes and dirt heaps, yet contractors regularly overshoot budgets. The Independent Media Consortium Productions (IMCP) investigates the money trail.*

The Kabul Municipality has accused the Turkish-owned Copy International and three Afghan firms -- Hewadwal, Latifi and Quyash Niazi -- of inflating road-construction costs.

A committee appointed by the president’s office in end-2008 to probe the charges of embezzling funds and failing to adhere to the terms of the contract had representatives from the ministries of economy, public works, and finance, the State Administration Office and Kabul Municipality. The findings were submitted with evidence to the presidential palace.

Kabul residents complain the roads that have been repaired are in the10th, 1st, 2nd and 17th districts where the rich and powerful live. Meanwhile, work has not finished on a 2 km stretch from Campany to Mahtab Qala that should have completed in end 2011. In the 13th district, Reza, a resident says, “The work is going on very slowly on Barchi road, a grinder works like an ant …”

The findings, which IMC has made public for the first time, has been endorsed by its authors Engineer Abdul Ahad Wahid, Technical and Construction Deputy Mayor of Kabul Municipality, Muradi, representative of the palace, Engineer Adel Shah, representative of Ministry of Public Works, Nayeb Khail representative of Finance Ministry and Bismillah Bismil, the technical adviser to Kabul Municipality.

The companies that claimed the entire budget for the projects, did not bother to return the money for work that remains outstanding. Instead, additional funds handed out by the Kabul Municipality have also been pocketed.

Investigations by IMC reveal that Quyash Niazi spent 4.43 million dollars to pave a 70 metre wide road in the west of Kabul but charged Kabul Municipality 7.2 million dollars. Copy International spent 16 million dollars on the road from the airport to Intercontinental Hotel, but collected 18 million dollars.

Documents submitted by Hewadwal show the cost of work on Qala Zaman Khan in the 16th district was 5.1 million dollars but Kabul municipality has disbursed 10.5 million dollars. Receipts and invoices also show that the cost of repair work for the 60 metre-Ahmad Shah Mena road in the 12th district through Bagrami executed by Latifi was 11 million dollars but Kabul municipality paid 12.95 million dollars.

Kabul Municipality has not taken action.


Call for probe

On Dec 16, 2002, Quyash Nazari signed a contract to build a 70-metre road west of the airport off Shaheed to Deh Kepak square within one year. A second one-year contract was agreed on 2005. But 10 years later the work remains undone and the project has ground to a halt. The previous team in the Kabul Municipality had requested the Department of Government Cases (in the Ministry of Justice) to prosecute Quyash Niazi for failing to execute the project satisfactorily.

The letter number 81 dated May 2, 2009, issued by Kabul Municipality to the Department of Government Cases states, “As the Quyash Niazi Company has left the work of a public utility project unilaterally and without consultation with the Kabul Municipality so the company should be prosecuted. Also stringent action must be taken to ensure the work is not postponed and public money is not wasted.” 

The letter has been signed by Abdul Ahad Sahebi, the former mayor of Kabul, who says the company is untraceable, and its address is unknown.

Engineer Abdul Majid, the former head of the maintenance department of Kabul Municipality issued a letter number 199/511 in 2007 to Quyash Niazi construction company. He complained about the poor quality of work, and warned the company that its work was below “standard”.  The asphalt has melted in the heat, and could cause fatal car accidents.

There is both documentary and other evidence including from Kabul Municipality that Quyash Niazi has taken loans of 10,000 dollars from Ministry of Mines and 50 million Afs (875,000 USD) from Pashtani Bank, but hasn’t returned the money.

Pashtani Bank has requested the municipality not to give contracts to the defaulting Quyash Niazi but the municipality has not paid heed.


Official indifference

Kabul’s new mayor Mohammad Yunus Nawandish set aside the council of ministers’ decision to boycott the defaulting companies, and went ahead with awarding them new projects and pumping more funds into old contracts.

In letter number 4617/4622 in 2009 two directorates of Kabul Municipality, Buildings Control and Audit Department and City Planning and Implementation Department, wrote to the four companies.

The letter stated that as per the suggestion of the Department of Policy and Coordination and decree number 3243 in 2009 the project deadlines have been extended: Latifi company has three months time, Copy International six months, Quyash Niazi six months and Hewadwal which has two projects Rahman Mena and Qala Zaman Khan one year’s time.

Further the letter informs the companies to complete all the legal formalities and inform Kabul Municipality officially should they not wish to continue in which case they would face legal action.

Off the record officials in the municipality accuse the new mayor of being hand in glove with the four companies.

Abdul Razaq Malek Abdul Rahimzai, the former deputy head of Urban Services in Kabul Municipality, recalls the previous mayor had cancelled the contracts and stopped payments of defaulting companies following a decision of the council of ministers. His successor has revoked this earlier order.

“I sent numerous reports to the palace and parliament about the indebtedness of the four companies. I also informed Mr Azizullah Ludin, chairman of the High Office for Oversight and Anti-corruption (HOOAC),” he told IMC.

Rahimzai has dispatched a 10-page report to both the palace and the National Assembly on March 20, 2013. He pleads mayor Nawandish “has paid more money than the cost of the projects. Many violations have taken place since he has become the mayor and no work has been done yet in implementing the infrastructural projects.”

The mayor has been photographed with Sayed Mahmood Dadmanesh, the head of Quyash Niazi, in a picture printed on page number one, issue number 7, serial number 612 dated November 28, 2012, Pamir weekly, the official publication of Kabul Municipality. The picture was taken at the opening of a park in Shahrara, Kabul.


Evidence of collusion

Some members of the parliamentary commission of transport, communications and municipalities’ affairs accuse the Kabul mayor of colluding with the companies and breaching the law.

The commission’s Farhad Sidiqi says, “There is not just one instance of wrongdoing by mayor Nawandish. There are many. Quyash Niazi owes money to Kabul municipality. A committee assigned by the palace to probe the company has found evidence that it has taken a large amount of money from Kabul Municipality.”

Sidiqi adds that the Kabul mayor instead of filing a complaint against Quyash Niazi in the Attorney General’s Office has given it an additional 1.1 million dollars.

Integrity Watch Afghanistaninfo-icon (IWA) avers Kabul Municipality has defaulted on publishing contracts as decreed under presidential order number 45.

Yama Turabi, head of Afghanistan Transparency Watch, observes that just a few high-ranking government officials have ever been charged or punished for corruption. “Civilian scrutiny must increase in contracts awarded by government institutions to counter corruption in the system,” he believes.


On the ground

Abdul Rahimzai, ex-deputy head of Urban Services, Kabul Municipality, accuses road contractors of using the worst quality asphalt. “Asphalted roads melt in the summer and are destroyed in the rain and snow in the winter. Roads don’t have drainage on the sides. A repaired road does not last more than six months,” he says.

A review of road works by a committee led by HOOAC that included members from the ministries of city development, public works, and finance, and the Kabul Municipality criticised the quality of the road between Kabul Airport and Intercontinental Hotel constructed by Copy International.

A report was submitted to the presidential palace on August 12, 2008.  “The road was found with major defects that would pose a risk to traffic.”

The road was handed over to the municipality on April 16 this year. According to a source in the construction company, who did not want his name mentioned, Copy International has inflated costs and charged 2 million dollars more than its cost of construction.


Missing money

The daily Hasht Sobh (8 am) published a report on Dec 25 last year alleging that 48 million Afs (840,000 USD) were embezzled from Kabul Municipality to transport “garbage and debris” from the airport road. The mayor, Nawandish, was accused of paying “more than 48 million Afs to Copy International for illegally transporting garbage and destroyed parts of road between airport and Intercontinental Hotel in 2011.”

A complaint sent to the AG’s office is under scrutiny. Ruhullah Karimi in the AG’s office confirmed, “The Kabul mayor and eight others are accused of embezzling 48 million Afs from the Kabul Municipality.”

Karimi further adds, “ We have investigated eight projects since last year and have taken separate action under the law.” The complaints vary from non-completion of work to cracks in the road. “Repair work should be completed within this year but many of our decisions have not been put in practice yet,” he said.

The four defaulting road construction companies owe Kabul Municipality millions of dollars but Hewadwal claims it is owed money.

Engineer Mohammad Azim, a company official, alleges the municipality has issued cheques for its Rahman Mena project on the basis of calculations for the Qala Zaman Khan project. The municipality owes Hewadwal 500,000 dollars, he claimed.

The matter has been sent to the AG’s office by HOOAC for investigation in 2010 through letter number 1804 including complaints of residents from the 12th district regarding construction of the 60-metre wide Qala Zaman Khan road and “embezzlement of an amount of 5,434,099.2 USD of municipality’s property”. 

Engineer Azim told IMC the charge of embezzlement is an “insult to myself and my company”.

The HOOAC report hints at additional money being taken by the four companies under investigation.

Mohammad Omar Muhabat, the head of its investigation department, told IMC all four companies would be investigated.

“Quyash Niazi has not replied to our questionnaires at all,” he says. “The company has taken 1.1 million dollars. It had six months time to start and complete the work but it has not done so. The company did not show up to answer our concerns.” Neither did officials from Copy international and Latifi.

The IMC tried to get views of Copy International and Latifi but they declined to be interviewed. Neither did mayor Nawandish agree to talk to IMC about the charges of corruption against him including illegal construction of a five-storey house in Sherpur. Abdul Qader Arzo, the head of publications of Kabul Municipality, said the mayor does not have time for interviewsinfo-icon.


(*) Independent Media Consortium is a joint initiative of Pajhwok Afghan News, The Killid Group (radio and print media), Saba Media Organisation (Saba TV-Radio Nawa nets) and Hasht-e-Subh. This is the third of a series of investigative reports on corruption and human rights cases.

A report by Killid’s Akbar Rustami (Hasht-e-Subh) and Kreshma Fakhri (Killid).



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