Stalled lux­ury ho­tel projects in Kabul ‘lost $85 mil­lion’

Kuwait Times - - BUSINESS -

KABUL: Stalled lux­ury ho­tel and apart­ment projects next to the US Em­bassy in the Afghan cap­i­tal may have lost Amer­i­can tax­pay­ers $85 mil­lion and left the par­tially con­structed build­ings as se­cu­rity threats, a gov­ern­ment watch­dog said on Thurs­day.

The projects were par­tially funded by the Over­seas Pri­vate In­vest­ment Cor­po­ra­tion (OPIC), a US gov­ern­ment agency that aims to help for­eign in­vest­ment. But both now ap­pear to have been aban­doned in a cli­mate of in­creas­ing con­cern over se­cu­rity, ac­cord­ing to a let­ter to OPIC from the Spe­cial In­spec­tor Gen­eral for Afghanistan Re­con­struc­tion.

A sui­cide bomb at­tack on Wed­nes­day killed four peo­ple in Kabul, il­lus­trat­ing the pre­car­i­ous se­cu­rity in­volv­ing not only Is­lamic State and a Tal­iban in­sur­gency but also a wider break­down in law and or­der as gov­ern­ment con­trol has weak­ened. “The $85 mil­lion in loans is gone, the build­ings were never com­pleted and are un­in­hab­it­able, and the US Em­bassy is now forced to pro­vide se­cu­rity for the site at ad­di­tional cost to US tax­pay­ers,” the let­ter said, ac­cus­ing the de­vel­oper of pos­si­ble fraud and OPIC of lax over­sight.

Ground was first bro­ken for the ho­tel in 2004 by then-Afghan Pres­i­dent Hamid Karzai, with the project fi­nanced in part by an OPIC loan of $40 mil­lion that US of­fi­cials at the time called the “largest US pri­vate in­vest­ment in Afghanistan since the fall of the Tale­ban” in 2001.

It was ini­tially to be run by Hy­att In­ter­na­tional Cor­po­ra­tion and fin­ished in 18 months, ac­cord­ing to news re­ports at the time, but that never hap­pened. By 2007, a group of com­pa­nies re­ceived a new loan of $60 mil­lion to com­plete the ho­tel and Mar­riott In­ter­na­tional had agreed to man­age it, the let­ter said. It is not clear what hap­pened to the ini­tial $40 mil­lion in loans.


In 2013, con­struc­tion was drag­ging on, but the de­vel­oper, in­cor­po­rated in the Bri­tish Vir­gin Is­lands, promised it would be com­plete by the end of the year and OPIC ap­proved the dis­burse­ment of the last fund­ing, SIGAR re­ported in the let­ter.

Mar­riott re­port­edly with­drew from the ho­tel and right af­ter re­ceiv­ing the fi­nal loan fund­ing, the de­vel­oper told OPIC it was stop­ping all work on the project, SIGAR said. “Based on our in­spec­tions it is clear that the as­sur­ances made to ob­tain the fi­nal loan dis­burse­ment were false and mis­lead­ing,” in­ves­ti­ga­tors said. “We are cur­rently de­ter­min­ing whether ear­lier rep­re­sen­ta­tions made to jus­tify the prior dis­burse­ments were also false and mis­lead­ing.” To this day the hulk­ing build­ing sits empty, over­look­ing the US Em­bassy which pays an un­told amount of money to se­cure the struc­ture, ac­cord­ing to SIGAR. The same de­vel­oper was also in­volved in a re­lated project to build a neigh­bour­ing apart­ment com­plex with $27 mil­lion in OPIC loans, but con­struc­tion there was also halted af­ter the com­pany re­ceived the last fund­ing, SIGAR re­ported.

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.