$500 per gallon for gas – Sticker shock from war spending waste
The hospital in Gardez, Afghanistan under construction.
October 23rd, 2013
04:16 PM ET

$500 per gallon for gas – Sticker shock from war spending waste

By Jamie Crawford

$500 for a gallon of fuel?

That was the exorbitant figure paid with U.S. tax dollars to a contractor building a hospital in rural Afghanistan, according to a report from the government watchdog tasked with investigating expenditures on Afghanistan's reconstruction.

In the report from the Special Inspector General for Afghanistan Reconstruction (SIGAR), the International Organization for Migration was found to lack sufficient internal controls able to detect overpayments of at least $507,000 to the contractor it hired to build a 100-bed hospital in the town of Gardez.

It was part of a project begun in July 2008 in a cooperative agreement between the United States International Agency for Development and IOM.

The examples of oversight ineptitude are staggering.

The inspector general found one case where IOM paid the contractor, Sayed Bilal Sadath Construction Company, $300,000 for 600 gallons of diesel fuel – a cost of $500 per gallon.

In another instance, IOM was found to have paid $220,000 for an automatic temperature control device that the audit said should have cost between $2,000 and $10,000.

"IOM officials did not identify either of these discrepancies when making payments to SBSCC," the report said. "In addition, USAID never identified the overpayments and reimbursed IOM for these payments made to SBSCC."

Almost two years past the original completion date, the construction firm has requested six extensions to the contract according to the report.

While USAID maintains construction has been significantly hampered by its remote location in an area rife with insurgency, the agency has granted IOM an extension to complete the project by the end of the year.

Funded through a project to increase the capacity and access to healthcare facilities Afghanistan, the hospital is supposed to replace an existing 70-bed hospital in Gardez.

The inspector general found that the new hospital's annual operating budget and maintenance costs could exceed by five times the costs of the current hospital – a figure unlikely to be sustained by the Afghan government.

In a letter to Rajiv Shah, the administrator of USAID, and William Hammink, USAID's Mission Director in Afghanistan, John Sopko, who runs SIGAR, commended USAID's intent to conduct an audit to determine whether there were additional contractor overpayments that needed to be returned to the U.S. government.

Sopko also recommended USAID seek reimbursement from IOM of the identified overpayments in diesel fuel and temperature control devices.

The year-long inspector general audit ended this past September.

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Filed under: Afghanistan
soundoff (31 Responses)
  1. aj

    what the hell are we doing there

    October 25, 2013 at 3:45 pm | Reply
  2. James

    there's more to it than meets the eye. This wasn't the contractor simply overbilling to take advantage of the system. There is theft occuring BY AMERICANS who then hide the theft by saying it was used on this or that. Groups of people are bribing everyone from government offciails in Afghanistan and the US, the militaries of both countries, contractors (local and foreign, especially foreign), and anyone else they need to bribe to steal this money. War is a chance to make a windfall because it can all be argued to be lost in the "fog of war". We need very good expert uncrrupt investigators to track ALL the money going into these war zones. I'm sure that they'd find alot of in the pockets of high company and government officials in the US, Europe, and else where.

    October 24, 2013 at 2:24 pm | Reply
    • markmbha

      Touche!

      October 25, 2013 at 1:41 pm | Reply
    • NNN

      You hit that nail square and true on the head. The Army especially has the lowest quality, criminal and most corrupt employees. This is exactly the kind of thing they would do.

      October 27, 2013 at 8:28 pm | Reply
  3. mickey1313

    What a shock government contractors wasting our money. Just like every single penny given to haliburton.

    October 24, 2013 at 1:18 pm | Reply
  4. NNN

    The people who did this are just mirroring American values, get rich by any means, the methods used are of no consideration, just don't get caught. It was probably black market gasoline stolen from U.S. military facilities.

    October 24, 2013 at 12:02 pm | Reply
  5. Charles

    This did happen in July 2008 under a Republican Administration, oh well since we can't blame the Republicans, just blame it on Obama he is the scapegoat for everything that goes wrong in America.

    October 24, 2013 at 9:35 am | Reply
    • mickey1313

      Too true

      October 24, 2013 at 1:21 pm | Reply
  6. tomsugarland

    No accountability under government control work. The local crooks have made the lives of the afghan people harder.

    October 24, 2013 at 8:50 am | Reply
  7. Powder

    I am not American. Is it true that the Republicans inherited a budget surplus from the Clinton era and by the time the democrats were voted into power again, U.S debt was in the region of a trillion? Is it also true that under the previous leadership war expenditure in Iraq and Afghanistan was hidden?

    October 24, 2013 at 7:42 am | Reply
    • remember

      Companies would never never steal from tax payers after all they are CITIZENS??? and would never steal billions on top of billions of dollar and hurt this country and cry about paying 12 % tax
      I'm a citizen and I pay over 30% with out ever crying, just a question

      October 24, 2013 at 7:20 pm | Reply
    • 742

      Yes, there was a surplus. Two unfunded wars and Medicare Part D (drug prescriptions) will do that do almost any country.

      October 25, 2013 at 10:14 am | Reply
    • wcm

      Clinton robbed peter top pay paul by taking money from social security and balancing the books therefore creating a surplus and convincing many of his followers that he was a good president. Previous administrations had been doing it also and writing IOU's. problem is, that lie is coming home to roost but now we are printing money too and whitewashing the deceived.

      November 8, 2013 at 7:42 pm | Reply
  8. sgtrock101

    Everyone step back and take a deep breath. $500 gal of gasoline (top quality, no water and clean pure gasoline) is a fair price. I've worked a little logistics in an exploration company that goes into wilderness/unimproved/dangerous areas. $500/gal is reasonable. The cost of gas goes up astronomically because of distance from logistical center, how the fuel is handled, and insurance premiums for the operations company. The more hostile the terrain the price goes up-up-and away!!! If that's hard to believe then you supply it for less and try to make a profit at all; let alone profits worth the risks involved. Go ahead – try it. You'll find out the hard way and come back to eat a full month of crow.

    October 24, 2013 at 1:54 am | Reply
    • Harish

      I really am jealous of you, know why you have the balls to admit the truth
      thank you probably one day I may turn up like you

      October 24, 2013 at 2:15 am | Reply
    • jboh

      Does the same apply to $600 hammers, $2000 toilet seats, and $300 plastic caps for bar stool legs. I understand about transport to remote locations. You may well be right about gas to Afghanistan, but much defense spending is wasteful, and must be stopped like any other wasteful spending.

      October 24, 2013 at 11:12 am | Reply
    • Montello

      Hmmm, I've worked in mining exploration for over 40 years in some of the most remote places on earth. I've seen $40/gallon for diesel flown in first on a Herc, than transferred to a chopper for the last 50 miles, but never anything close to $500. If you will notice in the photo, there are multi-story buildings in the background. The implies the presence of roads and infrastructure. $10/gallon would probably be an exorbitant price there. $500/gallon is just plain criminal.

      This is just another example of extreme waste in government – brought to you be the same people who paid $100+ million for the non-functional Obamacare website.

      November 5, 2013 at 6:44 pm | Reply
  9. Christine

    I am a republican and this spending is ridiculous as well as abusive. But, look at the coverage it gets. Who knew? I stumbled on it. I will be the 5th comment on here. And I don't attack healthcare reform,, I attack the notion of making it a law, and having my healthcare dictated by the government. So, you see, what you see on TV about these "horrible" republicans is not always the case. :)

    October 24, 2013 at 12:33 am | Reply
    • George patton

      Good grief Christine, how can anyone in their right mind take up for these right-wing, self serving, greedy Republicans? Then again, many of most most of the Democrats are just as bad. Until this story broke, did you notice how no one in Washington ever brought it up? This alone shows just how much of a stranglehold the M.I.C. has on this government!!!

      October 24, 2013 at 8:11 am | Reply
      • Christine

        Exactly George. Crisis after Crisis,, cover up after cover up, everything is a secret. Like I said, I stumbled across this article. I watch a lot of news, and I haven't heard of this $500 gal of gas scandal, if you will. But then again, we are not suppose to know everything. We are kept intentionally uninformed. Its scary. I do not trust the government. Its too big, too nosey, too corrupt. It has its uses, but running and dictating civilians is not one of them. In my opinion. But I am one woman. And you are correct, the Dems are just as greedy and both sides are just as corrupt. Where are we to go? Who are we to believe in? Not a lot options out there, unfortunately.
        :)

        October 25, 2013 at 12:31 am |
      • Joseph McCarthy

        What we need to do Christine, is to revive the Progressive Party started by Theodore Roosevelt in 1912 also known as the Bull Moose party. The last presidential candidate of that party was Robert La Follette who ran in 1924. The reason Roosevelt started that party is that William Howard Taft along with his fellow Republicans threw in with the special interest groups of that time.

        October 25, 2013 at 9:58 am |
      • KawiMan

        We need to get both Republicans & Democrats out of our government. They are both corrupt and in spite of their finger pointing at each other, there is a lot of collusion between both parties than US citizens will ever know.
        Many of these politicians act like bitter enemies across party lines, but many of them are personal friends and laugh at the tax payers and voters all the way to their banks.

        October 29, 2013 at 6:07 pm |
  10. Randomer

    Wait.. I have to pay for Obamacare?! What's this crap?!

    October 23, 2013 at 8:38 pm | Reply
  11. Random

    On the bright side after we cut all the ridiculous waste and start keeping accurate inventories we have the potential to retain our defense preparedness while cutting the budgets. The waste really is that bad.

    October 23, 2013 at 8:27 pm | Reply
  12. Tom

    I don't hear any Republicans complaining about this type of government spending abuse; but they are quick to attack healthcare for children, the sick, the elderly, and other Americans in need of medical care.

    October 23, 2013 at 8:00 pm | Reply
    • WERTWERT32452345

      Well said, Tom. These Republican politicians are truly a disgrace to this nation and a boil on the butt of humanity itself! This is exactly where the bulk of our tax money goes and will continue to do so as long as these right-wingers get their way!

      October 23, 2013 at 11:36 pm | Reply
      • brandon

        all americans need too wake up and realize that if we cut 10% of our defense budget evry one of us could get healthcare for free! all republicans just want more wars to justify there defense bills. just remember no bid contracts for halaburton

        October 24, 2013 at 1:37 pm |
      • George patton

        Quite true brandon, quite true. Thank you.

        October 24, 2013 at 3:32 pm |

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