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Cablegate: Af: Anyak Mine Tender: Wb Comfortable with Current State Of

VZCZCXRO8504
PP RUEHDBU RUEHIK RUEHPOD RUEHPW RUEHYG
DE RUEHBUL #3087/01 2581302
ZNR UUUUU ZZH
P 151302Z SEP 07
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 0238
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC 0529
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 4204
RUEHFR/AMEMBASSY PARIS 2980
RUEHML/AMEMBASSY MANILA 1607
RUEHBY/AMEMBASSY CANBERRA 0272
RUEHOT/AMEMBASSY OTTAWA 1391
RUEHNE/AMEMBASSY NEW DELHI 7123
RUEHJA/AMEMBASSY JAKARTA 0057
RUEHRL/AMEMBASSY BERLIN 2105
RUEHUL/AMEMBASSY SEOUL 0079
RUEHLO/AMEMBASSY LONDON 3753
RUEHKO/AMEMBASSY TOKYO 1951

UNCLAS SECTION 01 OF 02 KABUL 003087

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, BDAHL, AND MNUGENT
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: Anyak mine tender: WB comfortable with current state of
play.

Sensitive but Unclassified

1. (SBU) In a September 13 meeting, World Bank staff informed
Embassy Treasury Attach and EconOff that based on the information
available to them, the initial evaluation of the Anyak copper mine
bids appears to have proceeded according to the process spelled out
in tender documents, and in accordance with the law. Citing sources
from within the Ministry of Mines (MOM) as well as conversations
with MOM Minister Adel, Minister of Finance Ahadi and Deputy
Minister of Finance Sharani, they reported that the
Inter-Ministerial Committee (IMC) has asked for another evaluation
of the bids due to difficulty evaluating the "non-mining"/ancillary
parts of the submitted bids (e.g., social and economic impacts.)
(Note: The IMC has requested meetings with bidders on September 15
and 17. U.S. bidder Phelps-Dodge is to go before the committee on
September 17. End Note.)

---------------------------------------------
Meeting to Evaluate the "Tinsel on the Tree"
---------------------------------------------

2. (SBU) Alastair McKechnie, the World Bank Country Director for
Afghanistan in the Bank's South Asia Bureau, speculated that bidders
will be quizzed about their ability to deliver the "tinsel on the
tree" extras included in their proposals so that empty promises can
be dismissed. One example given was a bidder's proposed railroad
from Central Asia through the Hindu Kush Mountains to Afghanistan, a
very expensive endeavor. It should then prove easier for the IMC to
evaluate the core of each bid and realistically include the value of
the promised extras. After meeting with the bidders, the IMC is
expected to make a final decision on the tender award; however, with
the start of Ramadan on September 13, Bank staff were unwilling to
speculate as to the timing of any follow-on IMC meeting, saying only
that the IMC decision-making process will take time.

-------------------------------------------
World Bank Message Mirrors Embassy Emphasis
-------------------------------------------

3. (SBU) According to McKechnie, the Bank's message to the IRoA has
mirrored that of the Embassy and focused on the need for
transparency, following the letter of the law and the government's
ability to justify its decision before an international audience.
McKechnie has directly conveyed this message to the Minister of
Mines, Minister of Finance, and Deputy Minister of Finance.
Additionally, McKechnie told us the following:

-- Minister Adel has insisted that after the tender is
awarded, all materials relevant to the evaluation of the bidders
will be available to the general public.

-- The World Bank has extended the contract for the MOM's

KABUL 00003087 002 OF 002


tender advisors, Gustavson and Co., to now include support to the
IGoA during the negotiating process with the tender winner.

-- Despite rumors to the contrary, the World Bank's sources
tell them the gap in bid "scores" between the top bidder and second
runner-up was very slim. (The rumored difference was a more
significant 30 points.)

-- The Ministry of Finance appears to have high visibility in
the IMC evaluation process and is pushing to ensure the process
focuses on determining the value of the core copper mine bid before
moving on to the secondary, promised "tinsel."

4. (SBU) Comment: Obtaining accurate information on the Anyak tender
evaluation process within the Afghan government is difficult on the
best of days. Despite this, the IMC's request for a second
evaluation of the bids is a positive development because a larger
number of ministries are represented than may have been on the
initial evaluation committee convened by Minister Adel. We also
welcome the IMC's decision to give bidders another opportunity to
clarify their bids and to focus on the core bid rather than the
various "extras" being offered by some to sweeten the deal. U.S.
bidder Phelps-Dodge has contacted the Embassy regarding their
September 17 appointment with the IMC and we intend to support their
bid as appropriate. End comment.

Dell

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