Costly Afghanistan Road Project Is Marred by Unsavory Alliances

Subcontractors, flush with American money, paid Mr. Arafat at least $1 million a year to keep them safe, according to people involved in the project and Mr. Arafat himself.

The money paid to Mr. Arafat bought neither security nor the highway that American officials have long envisioned as a vital route to tie remote border areas to the Afghan government. Instead, it added to the staggering cost of the road, known as the Gardez-Khost Highway, one of the most expensive and troubled transportation projects in Afghanistan. The 64-mile highway, which has yet to be completed, has cost about $121 million so far, with the final price tag expected to reach $176 million — or about $2.8 million a mile — according to American officials. Security alone has cost $43.5 million so far, U.S.A.I.D. officials said.

The vast expenses and unsavory alliances surrounding the highway have become a parable of the corruption and mismanagement that turns so many well-intended development efforts in Afghanistan into sinkholes for the money of American taxpayers, even nine years into the war. The road is one of the most expensive construction projects per mile undertaken by U.S.A.I.D., which has built or rehabilitated hundreds of miles of Afghan highways and has faced delays and cost overruns on similar projects, according to the special inspector general for Afghan reconstruction.

After years of warnings that Mr. Arafat was making a small fortune playing both sides in the war — and after recent queries by The New York Times about payments to him — American officials said they had finally moved to cut him off in April.

Despite the expense, a stretch of the highway completed just six months ago is already falling apart and remains treacherous. The unfinished portion runs through Taliban territory, raising questions about how it can be completed. Cost overruns are already more than 100 percent, all for a road where it was never certain that local Afghans wanted it as badly as the American officials who planned it.

At their worst, the failures have financed the very insurgents that NATO and Afghan forces are struggling to defeat. Some American officials and contractors involved in the project suspect that at least some of the money funneled through Mr. Arafat made its way to the Haqqani group, a particularly brutal offshoot of the Taliban.

Critics say that payoffs to insurgent groups, either directly or indirectly, by contractors working on highways and other large projects in Afghanistan are routine. Some officials say they are widely accepted in the field as a cost of doing business, especially in areas not fully under the control of the United States military or the Afghan government. As a result, contracting companies and the American officials who supervise them often look the other way.

“Does it keep the peace?” asked one United States military officer with experience in volatile eastern Afghanistan. “Definitely. If the bad guys have a stake in the project, attacks go way down.” The officer, like many of the people interviewed, did not want to be named for fear of retribution for criticizing a project that is considered a priority by the American and Afghan governments.

Some also suspected that Mr. Arafat had been staging attacks himself to extort more money for protection, a vicious cycle of blackmail that contractors and American officials acknowledged was a common risk.

In an interview, Mr. Arafat confirmed that he had been fired, but he called accusations that he had funneled money to the Haqqani group a “lie and propaganda,” and he denied staging attacks.

Lofty Goals, Lofty Price Tag

The possibility that American taxpayers’ money has been going to someone with ties to an insurgency that has killed American soldiers and Afghan civilians is just one of the many problems of the Gardez-Khost Highway.

From the beginning in 2007, no one thought that building the road would be easy. Traversing high, rugged terrain, the road rises to more than 9,000 feet. In winter, it is buried in deep snow. In summer, it is covered by a thick layer of chalky earth that engineers refer to as moon dust, which turns to mud in the rain.

But American officials judged the original price tag of $69 million to be worth the cost. The highway was seen as an important way to connect two mountainous provinces in southeast Afghanistan — Paktia and Khost — and wrest from the insurgents a route that they had long used to move money, men and guns into Afghanistan from Pakistan’s tribal areas.

Development officials hoped that the road would better link Afghanistan’s strategic border region to the central government in the capital, Kabul, and encourage commerce. The military hoped it would provide faster access for supplies and fresh troops.

Sangar Rahimi contributed reporting from Kabul.