Afghanistan stands by bidding process for Hajigak mine

McClatchy NewspapersFebruary 18, 2012 

KABUL, Afghanistan — Afghanistan's Ministry of Mines on Saturday rejected allegations of problems in the bidding for one of the country's largest mines, calling it "a fair and transparent process."

In a letter to McClatchy, the ministry's director-general for policy and promotion, A. Jalil Jumriany, said that the selection of bids for four blocks of the Hajigak iron ore mine in central Afghanistan was overseen by a team of Afghan government experts, and that a panel of international advisers found that the process was "conducted according to international standards."

However, Jumriany's letter did not challenge the main points in a McClatchy report published Friday, which raised allegations of flaws in the bidding process and that the winning bidders — a state-led Indian consortium and a Canadian firm — hadn't demonstrated that they could meet production targets.

Among the charges raised by Acatco — an Afghan-American firm that was short-listed for the contracts but failed to win mining rights — was that the winning firms hadn't shown that they'd secured adequate funding for extracting iron ore from Hajigak, often described as the jewel of Afghanistan's mining sector.

Acatco also charged that its bid was rejected despite offering clearer dates for starting production and higher royalty payments to the Afghan government. A complaints commission of the Afghan parliament has taken up the matter and summoned Afghanistan's minister of mines, Wahidullah Shahrani, who failed to appear at a hearing Saturday because he was traveling, according to a spokesman.

In its letter to McClatchy, the ministry accused Acatco's president, Nasir Shansab, of disclosing confidential information and trying to interfere in the bid evaluation process. Shansab denied the allegations.

The ministry said that the contracts to the Steel Authority of India, or SAIL, and Kilo Goldmines, the Canadian firm, hadn't yet been ratified by the Cabinet and that negotiations were ongoing. In announcing the two firms' winning bids on Nov. 28, the ministry said that the projects in Hajigak would "bring billions of dollars in mining investment and thousands of new jobs to Afghanistan."

Its letter was the ministry's first official response to McClatchy, which made repeated attempts to interview Shahrani through Tamim Asey, the ministry's director of public affairs and strategic communication. The ministry did not make Shahrani available for an interview.

(Stephenson is a McClatchy special correspondent.)

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