Contract delays led to cost overruns for the Kabul power plant and sustainability remains a key challenge / Special Inspector General for Afghanistan Reconstruction (SIGAR).

“January 20, 2010”.

Includes bibliographical references.

“SIGAR Audit-10-6 contractor performance and oversight”—cover page.

Summary: “Current risks for the Kabul power plant focus on its long-term sustainability, which will be affected by the GIRoA’s ability to generate sufficient revenue to pay for fuel and O&M expenses. USAID has taken steps to assist the GIRoA with its ongoing commercialization efforts. Nonetheless, USAID officials believe this process will take at least five years to complete and plans exist to cover the plant’s O&M costs for several years after turnover to the GIRoA. Whether the Kabul electric utility will have sufficient revenues in five years to assume these costs is open to debate. If the plant is not turned over to Afghan authorities within this time frame, USAID may face the difficult decision of whether to continue funding the plant’s operations or terminating U.S. involvement with the project and placing the plant’s future operation at risk. SIGAR further found that long-term sustainability is complicated by the decision by the GIRoA and USAID to construct a dual fuel instead of a diesel-only plant, providing the Afghans with a technically sophisticated fueling option they may not have the capacity to sustain”—(p. 13, conclusion).