30 pc of US aid siphons off as overhead expenses before reaching Pak, Afghanistan

May 17th, 2008 - 4:26 pm ICT by admin  

Washington, May 17 (ANI): Nearly 30 per cent of the US aid for Afghanistan and Pakistan is siphoned off as overhead expenses, in the form of consulting fee and other costs, before it reaches the region, said US Assistant Secretary of State Richard Boucher during a recent hearing of the House Foreign Affairs Subcommittee on the Middle East and South Asia.

He said that since the two countries had received billions of dollars in aid since 9/11, the overhead expenses run into hundreds of millions of dollars.

I think that on the high end, it might touch 30 per cent. For some of the not-for-profits, their overhead is going to be much closer to, say, 10 per cent, the Dawn quoted Boucher as saying at the hearing.

The issue came up for discussion when Panel chairman Congressman Gary Ackerman asked Boucher and another witness: How much of the funds are we talking about that were skimmed in the United States before it ever got to Afghanistan or Pakistan or anywhere else?

Mark Ward, a senior administrator at the US Agency for International Development, told the lawmaker that these are costs that the US government was well aware of before it entered into these contracts and grants.

Last week, former US ambassadors Richard Holbrooke and Thomas Pickering told the House Committee on Foreign Affairs that large sums from US assistant to a foreign nation went on consulting fees and overhead costs. They noted that much of the 750 million dollars earmarked for the tribal areas will never leave the US soil.

Ward, however, assured the panel that the administration was now making a serious effort to cut costs by hiring local contractors. Its strange that its taken us all this time and billions of dollars to figure out that the money to be spent on the ground should be spent on the ground, Ackerman retorted.

Citing an example, he said contract for hiring screeners at airports for Homeland Security, was sub-contracted three times at a cut of 20 per cent each. Consequently, the actual people doing the work received just 40 per cent of the total amount.

Ackerman also objected to the practice of involving US contractors for designing earthquake-proof schools in the areas destroyed by the 2005 earthquake in Pakistan . About this, Ward told the Congressman that although a Pakistani firm was building these schools, one of the top engineering firms in the United States was supporting the construction. (ANI)

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