Wednesday, November 3, 2010

What Can You Buy For $511 Million?

The U.S. Ambassador to Afghanistan said today that the State Department has signed a contract for $511 million worth of new construction at the embassy in Kabul:

The U.S. government will spend $511 million to expand its embassy in Kabul, the U.S. ambassador said Wednesday, describing the work as a demonstration of America's long-term commitment to Afghanistan.

"We make this commitment by commemorating the recent award of a $511 million contract to expand the U.S. Embassy here in Kabul," Ambassador Karl Eikenberry said during a ceremony at the construction site that marked the formal announcement of the contract.

I can hear the chorus of outrage already. That much? In this time of record-high national debt and unemployment! How did that ever get through Congress?

In other news today, Indian sources are reporting that President Obama's upcoming two-day visit to Mumbai will cost $200 million on security and hotel costs, which include booking the entire 570-room Taj Hotel:

The US would be spending a whopping $200 million (Rs. 900 crore approx) per day on President Barack Obama's visit to the city.

"The huge amount of around $200 million would be spent on security, stay and other aspects of the Presidential visit," a top official of the Maharashtra Government privy to the arrangements for the high-profile visit said.

About 3,000 people including Secret Service agents, US government officials and journalists would accompany the President. Several officials from the White House and US security agencies are already here for the past one week with helicopters, a ship and high-end security instruments.

I can easily believe that figure. If we added transportation and personnel costs, the total bill would no doubt be much higher. But let's just look at the $200 million figure, which is for two days out of a ten-day trip.

It breaks down to $8.333 million per hour. So, every 61.3 hours, or roughly every two and one-half days, the trip will cost as much as the Kabul embassy expansion.

That's what you can buy for $511 million. Whether you should or not, is something I will leave to others.


Anonymous said...

Not surprisingly, the Indian media has grossly exaggerated the cost of the president's travel. What does surprise me, though, is that someone who claims to be an expert on diplomatic security would buy into such a blatantly exaggerated figure. 200 million is a little under 1/4 of Canada's total security costs for the G-20. Renting every room in the Taj Hotel, even assuming that each room rented for the top room rate, would only cost about 2.5 million. Frankly, it seems unlikely that the price tag for the whole trip would even approach 200 million.
Perhaps you would like to correct the record for those who might stumble upon this post later?

TSB said...

I would be delighted to "correct the record," as you say, except there is no record of the cost of this trip. The White House won't provide one. For myself, I'll take that as a clue that the cost is huge. You may prefer to assume the oposite.

I'm not sure I take your point about the G-20 summit. Canada spent $860 million in security and accommodation costs, etc., to host a three-day event (see: Are you suggesting a ten-day Presidential tour of Asia should cost any less that that? If so, I disagree.

The air support costs alone might top $200 million. ABC News reported that a multi-country Presidential trip to Asia in 2000 used 77 aircraft - Air Force 1, cargo planes for the limousines and helicopters, refueling tankers, and many more. I'm sure the number of support aircraft has gone up considerably post-9/11.

Then there are the personnel costs for a few thousand staffers and hangers-on, Secret Service, DOD and other agency support personnel, and the time of hundreds of State employees.

Renting the entire Taj Hotel - the 570 rooms, the restaurants, bars, eleven banquet rooms, ballroom, and all - is only the icing on the cake, but that's a lot of icing. It isn't unusual to take an entire hotel for a Presidential trip, but they don't normally take the biggest 5-star hotel in town. I know the hotels that are used for Presidential visits to Jerusalem, for example, and they are nowhere near the size of the Taj. Bush also took an entire hotel during a visit to India, but it was a mid-size one.

Maybe someday the White House will let us know what we're paying for this trip, and then we won't have to guess.