Saturday, May 28, 2011

Al Kamen Alert!

The Pakistani press has a story today about the gigantic embassy construction project that the Office of Overseas Buildings Operations (OBO) is carrying out in Islamabad, and they managed to get a little bit of accurate news in there amidst the usual half-truths, paranoia, and canards.

US staff shrinks, embassy expands:

ISLAMABAD, May 27: Amid frayed relations over the May 2 raid in Abbottabad killing Osama bin Laden, the United States has started work on expanding its embassy in the capital.

The construction work has been started on the embassy’s existing plot and additional land it acquired last year in the Diplomatic Enclave but without paying its cost – Rs1.7billion – to the local authorities. [TSB note: that's half-truth #1]

Additionally, the embassy has thus far not submitted site plan of its proposed complex for approval by the Capital Development Authority (CDA). [TSB: that's half-truth #2]

“We have started a construction project to rehabilitate our ageing compound facilities,” US embassy spokesman Alberto Rodriguez told Dawn. “We are coordinating closely with CDA, Ministry of Foreign Affairs and other pertinent ministries on all elements related to the construction.”

The US authorities have also asked the government for a waiver on stamp duty and transfer fee of additional eight acres (almost 40,000 sq yards) of additional land.

However, the spokesman maintained: “The embassy of Pakistan in the United States is exempt from taxes on its property in Washington D.C, as are all other diplomatic bilateral missions in line with the provisions of the Vienna Convention on Diplomatic Relations. Reciprocally, the embassy of the United States in Pakistan is exempt from taxes on our property holdings here.”

-- snip --

The embassy acquired additional eight acres besides its existing building for Rs1.7 billion but so far no money has been paid to the authority. [Half-truth, see above]

A senior CDA official, who did not want to be named, said apart from not releasing the payment, the embassy also did not submit site plans for its proposed complex on the additional land. [Ibid]

Earlier, the embassy acquired additional 18 acres at the rate of Rs15,000 per sq yard in the Diplomatic Enclave. There were reports that the US was increasing the number of staff in the Islamabad embassy, including 350 Marines and even Armoured Personnel Carriers (APCs). [That last sentence is a two-for-one deal, a paranoid fantasy about Marine Security Guards on top of a canard about armored vehicles]

Later, the CDA through the Foreign Office increased the cost of land from Rs15,000 per sq yard to 80,000 per sq yard (almost equivalent to $1,000). But the embassy opposed the increase and refused to pay according to the revised rate. Other embassies and foreign missions wanting to have land in the enclave had also rejected the proposed increase. [That's true - wow!]

Due to the strong reaction of the diplomatic community, the government had reduced the price to $500 per sq yard.

The US Embassy had also cut down its demand for additional land from 18 to eight acres so that it could pay the revised cost within the amount allocated by Washington for the purpose.

That price per acre of land is the real interesting bit of news here. The Pakistani Capital Development Authority cut their first asking price in half, from $1,000 a square yard to $500, and we are reportedly buying eight acres at that price. There are 4,800 square yards in an acre, so we will pay $2,400,000 per acre, or $19,200,000 for the whole parcel.

How expensive is that? For comparison, a typical quarter-acre residential lot in Fairfax County, Virginia, is valued at about $100,000, or roughly 4 percent as much as the land we are about to acquire in Islamabad.

Of course, another 19 mil isn't much when you consider the scale of the embassy construction project. It's really, really, big:

The project will consist of the design and construction of a New Embassy Office (NOB), new office annex building (NOX), Marine Security Guard Quarters (MSGQ), general services offices and warehouse, central utility plan, site utilities and infrastructure, compound access facilities, and demolition of existing buildings on the US Embassy Compound in Islamabad, Pakistan. Approximate Site: 168,000 square meters. New buildings area: 79,000 square meters; Estimated design-build cost: $530 - $630 million

-- snip --

The project will consist of the design and construction of a permanent staff housing buildings, recreation and support structures, central utility plan, site utilities and infrastructure, and compound access facilities on newly acquired property for the US Embassy Compound in Islamabad, Pakistan. Approximate Site: 48,600 square meters; New buildings area: 75,000 gross square meters; Estimated design-build cost: $140 - $200 million

What with this being a three-day weekend in Washington, the WaPo might be asleep at the switch and we won't see this tidbit In The Loop.


Anonymous said...

TSB: And will this be carried out with the same skill and dexterity as the Baghdad Embassy? I OK'd deployment for the new security chief there at SRP and as I recall the place opened about 18 months behind schedule. What was it?
When the alarm system went off it turned on the fire sprinklers and flushed all the toilets? How are they liking things in Baghdad these days??? gwb

TSB said...

The Baghdad construction job was pretty bad, but not quite as bad as the news media made out. It was a case of 'do you want it good, or do you want it now?' The main problems were:

(1) There was a war going on all around the work site, with F16s engaging enemy on roads just outside the embassy, salvos of rockets and mortars landing, etc., and,

(2) The gov't cheaped out and went with a firm fixed price contract by the lowest bidder. Since no one in his right mind would do that work on a firmed fixed price contract, no U.S. company bid and we got First Kuwaiti instead. They did a $1 billion job for about $700 million, meaning a half-assed job that needed extensive remediation.

The Islamabad job is much closer to normal, and contracturally saner, and it will take a good five years to complete. Anything can happen, but SFAIK it's going well.

Anonymous said...

Thanks! gwb

Anonymous said...
TSB: Thanks to State Dept. Cables we can now clearly how oil prices got so high in 2008! Where would we be in trying to figure out what is going on if not for our diplomats?? Keep up the great work! gwb

TSB said...

The speculator thing (many investors going long on oil futures) makes sense as a cause of price increases, but I don't know what any government can do about that. But, we could stop inflating the money supply, which would lower prices and do other good things for the economy.

Anonymous said...

TSB: Great post about Memorial Day!

The problem with the oil market is that a big share of oil and gasoline is traded outside the exchanges. That means speculators can disguise how much money they are putting into buying oil. It took many years for things to get that way but it needs to change cause we are paying a high premium.
You are right about Bernanke! Please talk to him about that! gwb

Anonymous said...

Who cares in the Middle East what Obama says? (Robert Fisk 5/21/11)
Obama and Secy Clinton have had a worse May than my Ichiro (who is batting .213 for May) At least his/my
Mariners have won 10 of their last 13. Fisk gives us his best post of the month on Obama's totally muddled mideast ways... suggesting he is now totally irrelevant there. gwb