Companies face bankruptcy as development projects stall

A worker at Khaf-Herat railway project in Herat province, Afghanistan, in April 2021.

Work on many development projects have stopped over the past year following major political changes in the country that dried foreign aid, adding another layer of complexity to Afghanistan’s fragile economy.

The projects with high budgets such as roads and dams’ construction, but some low budget projects like construction of roads and canals have been resumed and some have been completed since last August.

Private companies owners who have contracted the projects said their businesses have stopped and they are facing bankruptcy.

Some projects were funded by the World Bank, which were stopped because the international organization cut off its funds over the closure of secondary schools for girls in Afghanistan.

A contractor company’s official, Haroon Azim, said the company worked on two main projects: a 43-kilometer railway project between Herat and Turkmenistan worth $58 million and a 53-kilometer road project between Herat and Badghis worth $65 million.

Work on both projects have stopped, the official said.

“The (previous) government owes at least $30 million to our company from the two projects and this has heavily damaged our operations,” he said.

The official added that 98 percent of ring road projects financed by Saudi Arabia under the previous government have been suspended as well.

The Herat railway project employed at least 1,500 people who all have lost their jobs now, the official said, adding over 2,000 people were working in the Herat-Badghis ring road project but all are unemployed now.

Fawad Hashimi, head of a private company, said they contracted a number of construction projects under the previous government, but all have been stopped over the past year, damaging their business.

“We were operating in construction and logistics and were implementing many projects, but all projects were stopped following the political changes,” Hashimi said.

Hashimi’s company had also contracted the construction of a road in Kapisa province and had completed it by 60% percent, but the project has stalled since last August.

He said that he has fired at least 400 people who worked with him on various projects.

50 major projects remain unimplemented

A large number of main development projects were implemented under the public works ministry during the previous government.

Taliban officials at the ministry said that more than 50 major projects have remained unimplemented, vowing to make efforts to resume work on them.

Hamidullah Misbah, Taliban spokesman for the public works ministry, said the impacts of the stalled projects are tangible as many have lost their jobs.

“These projects were funded by foreign countries, especially the World Bank,” he said. “We are in contact with donors of these projects and we have had improvements in this regard.”

Employees who lost their jobs

Mohammad Shakib Sadiqi, a engineer, who worked with a road construction company has lost his job over the past year, facing physiological pressure as he described.

“I feel I am a burden on society and my family, and sometimes, I face psychological pressure,” Sadiqi said.

Many of the development projects were marred by widespread corruption and lack of transparency in contracts awarding process under the republic government.

This pushed the previous government to form a new office, the Operation and Support Office of the President for National Development, with a special authority to implement projects unilaterally and award contracts without a bidding process. There were many reports about corruption in operations by the office at the time.