AF: Anyak mine tender: WB comfortable with current state of

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