PRT Herat: Iran's Influence in the West:

UNCLAS SECTION 01 OF 02 KABUL 003569

SIPDIS

SENSITIVE
SIPDIS

DEPARTMENT FOR SCA/FO, SCA/A, NEA/IR
NSC FOR AHARRIMAN
CENTCOM FOR CG CFC-A
DUBAI FOR IRAN OFFICE

E.O. 12958: N/A
TAGS: ELTN ECON PREL IR AF
SUBJECT: PRT Herat: Iran's Influence in the West:
Inauguration of Highway, Rail(!) Projects


KABUL 00003569 001.2 OF 002


Summary
--------------


1. (SBU) On July 29, the vice presidents of Afghanistan and
Iran dedicated three Iranian-funded projects: completion of
a portion of highway linking Herat province to Badghis and
points north; "ground breaking" for a railway from Khaf,
Iran, to Herat (pledged by Iranian President Ahmadinezhad to
President Karzai in Dushanbe); and the opening of the Herat
branch of Iranian-owned Arian Bank. The ceremony
encapsulated Iran's efforts to gain influence via commercial
outreach into western Afghanistan; the GOI's demonstrably
patronizing attitude towards its Afghan counterpart; and
uncritical Afghan acceptance of Iranian development
"largesse" - even when financially and economically unsound
for Afghanistan. End summary.


2. (SBU) In a ceremony at Heart's (still unopened) "Five
Star Hotel," Afghan Vice President Ahmad Zia Massoud and his
Iranian counterpart for Executive Affairs, Ali Saeedlou,
formally opened a 60-kilometer portion of the Herat-Qal-i-
Naw stretch of the Ring Road, built at a cost of USD 23
million. The new hardtop to the provincial frontier with
Badghis will eventually link with the Spanish-built portion
of the Ring Road, currently under construction. When -- and
if -- completed, the rail line from Khaf to within 15
kilometres of Herat would extend 191 kilometres. An Iranian
Embassy press release said Iran would fund (at $78 million)
the 77 kilometre portion of the railway from Khaf to the
Iranian-Afghan border and 61 kilometres of rail into
Afghanistan ($75 million). The GoA would have to finance
the rest of the track (roughly 50 kilometres) to Herat city.
Moreover, according to the Iranian vice-president, the
project must be completed in three years, as per a signed
mutual agreement.

Unrealistic Railroad?
--------------


3. (SBU) While Saeedlou affirmed the commercial utility of
the Khaf-Herat railway, PRToff later privately spoke with
Herat Governor Anwari and Herat MFA Representative Afzali
about the economic viability of such a rail link and
questioned whether such a project would ever become
operational, let alone profitable. Among issues apparently
never considered by the Afghan side: competition with the
new and underutilized Islam Qala-Herat highway which the
railroad would parallel; inevitable land disputes over the
rail right of way; truck-based customs facilities now
planned for Islam Qala; the railway's inherently low
capacity utilization combined with very high marginal costs;
the need for expensive engines/carriages/maintenance shops
and on-load/off-load infrastructure; management, labor and
training; the high cost of capital; the railway's short
distance which in any case necessitates truck movement for
all freight; and, perhaps most importantly, the absence of
rail within Heart's own provincial development priorities.
While PRToff conceded that Iran could spend, or waste, its
resources as it sees fit, he noted that Iranian contractors
and engineering firms were the project's big beneficiaries.
Meanwhile, the GoA and Herat Province would inevitably be
called upon to absorb the project's enormous costs before
one kilogram of freight could be shipped. End comment.

Iranian Remarks
--------------


4. (SBU) In his remarks, Saeedlou clearly sought to make a
political statement. According to journalists who attended
the ceremony, the Iranian VP explicitly announced Iran would
halt its Afghan reconstruction assistance unless the GoA set
a date for the departure of "international forces" from
Afghanistan. However, in a private conversation with
PRToff, MFA Rep. Afzali denied that the Iranian Vice
President had made such a statement. Given reported
confusion among participating Afghan officials during the

KABUL 00003569 002.2 OF 002


event, it is likely Saeedlou did try to score points for
Tehran on this issue. Afzali confessed that the ceremony
"belonged to the Iranians." The Iranian team was well
prepared with "everything on paper." An Iranian advance
team landed in Herat 48 hours before Saeedlou's arrival.
The Afghan side, on the other hand, had not prepared nor
sent any advance team to Herat. Afzali agreed that while
the Iranians were thinking of their image, the participating
Afghans were concerned with cutting the ribbons and
returning to Kabul.


5. (SBU) Behind the scenes, protocol hiccups marred the
event. Because of an argument over arrival timings, Afghan
VP Massoud waited for three and a half hours for the arrival
of his counterpart. Iran insisted Saeedlou give his speech
after Masoud, presumably so that his message, including
diatribes against the U.S., Israel, etc., would resonate
most effectively with the audience. The MFA won the day and
kept Massoud last - although given the reportedly poor
caliber of his unrehearsed, unscripted speech, it probably
made no difference. Afzali bemoaned the GOA's amateurish
performance, compared to the polished Iranians, which he
blamed largely on the VP's own office.

Comment
--------------


6. (SBU) While the Herat-Faryab portion of the Ring Road
is an important national project, the same cannot be said
for the Khaf-Herat railway. Heratis seem to believe the
project will catalyze development and trade. Little or no
consideration appears to have been given to the huge costs
relative to the minimal benefits such a project entails.
Nor has anyone, in Herat at least, questioned why rail is
necessary when Herat already enjoys the country's best road
connection to the border. Diverting scarce capital
resources to a costly rail project - which appear to
primarily benefit Iranian contractors - is not wise and
bodes ill for Afghanistan's economic development.


7. (SBU) Senior GOA leadership must be better prepared for
future high level visits of this nature. While Afghan
officials did not join in with Saeedlou's vitriolic anti-
U.S./anti-Israel attacks, they were unprepared with any
response or talking points, thus giving the appearance of
benign concurrence with Iranian rhetoric.
NEUMANN