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Viewing cable 07KABUL2852, AF: Sheberghan project on schedule despite ADB pull out.

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Reference ID Created Released Classification Origin
07KABUL2852 2007-08-24 09:35 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Kabul
VZCZCXRO9011
PP RUEHDBU RUEHIK RUEHPOD RUEHPW RUEHYG
DE RUEHBUL #2852/01 2360935
ZNR UUUUU ZZH
P 240935Z AUG 07
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 9878
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC 0527
RUCNAFG/AFGHANISTAN COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEKJCS/OSD WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RHMFIUU/HQ USCENTCOM MACDILL AFB FL
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUCNDT/USMISSION USUN NEW YORK 4201
RUEHFR/AMEMBASSY PARIS 2978
RUEHML/AMEMBASSY MANILA 1604
RUEHBY/AMEMBASSY CANBERRA 0269
RUEHOT/AMEMBASSY OTTAWA 1389
RUEHNE/AMEMBASSY NEW DELHI 7110
RUEHJA/AMEMBASSY JAKARTA 0055
RUEHRL/AMEMBASSY BERLIN 2103
RUEHUL/AMEMBASSY SEOUL 0076
RUEHLO/AMEMBASSY LONDON 3749
RUEHKO/AMEMBASSY TOKYO 1948
UNCLAS SECTION 01 OF 02 KABUL 002852 
 
SIPDIS 
 
DEPT FOR SCA/FO, SCA/RA, AND SCA/A (A/S BOUCHER, GASTRIGHT,DEUTSCH) 
DEPT PASS AID/ANE, OPIC 
DEPT PASS USTR FOR GERBER AND KLEIN 
DEPT PASS OPIC FORZAHNISER 
DEPT PASS TDA FOR STEIN AND GREENIP 
CENTCOM FOR CG CFC-A, CG CJTF-76, POLAD, JICENT 
NSC FOR AHARRIMAN 
TREASURY FOR ABAUKOL AND BDAHL 
MANILA PLEASE PASS ADB/USED 
PARIS FOR OECD/ENERGY ATTACHE 
OSD FOR SHIVERS, SHINN 
COMMERCE FOR DEES, CHOPPIN, AND FONOVICH 
TOKYO ALSO FOR AID COUNSELOR AANENSON 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958 N/A 
TAGS: ENRG EFIN EPET ETRD KPWR EAID PGOV AF
SUBJECT: AF: Sheberghan project on schedule despite ADB pull out. 
 
REF:  Kabul 1982 and previous 
 
Sensitive but Unclassified 
Manila see Action Request at para 5. 
 
--------------------------------------------- --------- 
Sheberghan Power Plant project back to original blueprint. 
--------------------------------------------- --------- 
 
1. (SBU) SUMMARY: The Asian Development Bank (ADB) has pulled out of 
a proposed project for the comprehensive development of northwest 
Afghanistan's most promising gas fields in the Amu Darya basin, near 
the site of the proposed Sheberghan power plant (reftel), despite an 
agreement to combine funds in a joint project.  In a letter to USAID 
dated July 31, ADB cited internal policies prohibiting cooperation 
with Louis Berger Group, half of the joint-venture contractor 
selected for the project.  The joint project would have saved close 
to USD 4 million for USAID and ADB in mobilization and supervision 
costs.  Despite the loss of these cost savings, the USAID project to 
rehabilitate three gas fields for the exclusive purpose of fueling 
the Sheberghan power plant is proceeding apace, with a contractor 
expected in the field by early December. 
 
--------------------------------------------- --- 
Joint project proposal runs into technical snag. 
--------------------------------------------- --- 
 
2. (SBU) The proposed joint USAID-ADB project (reftel) to develop 
the Amu Darya gas fields was born of Minister of Mines Ibrahim 
Adel's frustration with the lack of ADB progress on a USD 24 million 
loan, approved in 2003, for the rehabilitation of gas fields in the 
Amu Darya basin and the rehabilitation of the pipeline connecting 
Sheberghan and Mazar-i-Sharif.  USAID, already committed to 
rehabilitating three gas fields to identify gas reserves for the 
proposed Sheberghan 100 MW electric power plant, saw the possibility 
of reducing costs and spurring the ADB bureaucracy into speedier 
action.  The USG, encouraged by the Ministry of Mines, approached 
ADB's representatives with a proposal in May 2007, and struck a 
tentative agreement increasing the project's scope with ADB's 
funds. 
 
3. (SBU) In a letter dated July 31, 2007, ADB informed USAID that 
following an internal review, ADB had determined it could not 
participate in a combined project.  The reason given was that Louis 
Berger Group Inc., one of the two joint venture partners set to 
implement the project, was "currently under sanction by ADB and, as 
such, we have now confirmed that they are ineligible to participate 
in ADB-financed activities."  Although various scenarios were 
examined to determine if this decision could be altered without 
further delaying the start of the project, it was decided that USAID 
would proceed with its Sheberghan project without ADB funds.  We 
understand that ADB plans to proceed with its USD 24 million project 
as originally envisioned. 
 
KABUL 00002852  002 OF 002 
 
 
 
------------------------- 
Project proceeding apace. 
------------------------- 
 
4. (SBU) USAID's contractor announced the USD 12 million project 
tender on July 31, with a closing date of September 12.  Of the 30 
companies contacted by the contractor regarding the project, twelve 
have expressed interest and are expected to submit a bid. 
Additional funds may become available to increase the number of 
wells to be explored and rehabilitated from three to seven.  Barring 
any unforeseen difficulties, USAID expects a contractor in the field 
by early December.  A report on the status of the wells and the 
supply of natural gas available for the powering of the proposed 
Sheberghan power plant is expected in May/June of 2008. 
 
WOOD