U.S.-led Afghan reconstruction projects to end because of security dispute

Karzai's chief of staff, Umer Daudzai, said in an interview Thursday that the president does not intend to grant an exemption for development firms. "We know some projects may be delayed. We know some projects may close down even," he said. "But it's worth it because the other side [retaining private security contractors] is even more dangerous."

He said the decision was made "after a thorough examination" by the Afghan government. "We did not take this decision lightly," he said.

Daudzai said the Afghan government would be open to an extension "of a few months" if development firms and the foreign governments that fund them propose "a good plan of action" to transfer security responsibilities to the Afghan police and army, perhaps by integrating some of the Afghan private guards into government security ranks. "If the roadmap is a convincing one, then there is room to negotiate a compromise," he said.

U.S. officials have voiced support for Karzai's overall goal of disbanding private security companies, but they have insisted that several years are needed to complete the transition. "We have publicly committed to the goal of moving away from private security - we just need to find a way to implement it that works for everyone," a third U.S. official involved in the issue said.

Although the ban does not take effect for nearly two months, some development firms have started closing or suspending their operations because of the time required to unwind activities in an orderly way. One of them, Development Alternatives Inc. of Bethesda, has begun ceasing work on a program to improve local governance across the country, including in southern and eastern provinces that are the focus of U.S. military activities.

DAI has informed the U.S. Agency for International Development that it intends to cancel 330 projects totaling $21 million and not launch $6.2 million more in new activities, according to U.S. officials. DAI spokesman Steven O'Connor said that the firm "was winding down the [Local Governance and Community Development] project early as a result of the decree."

Another large development firm, International Relief and Development of Arlington, is "making the moves to leave," another U.S. official said. The company, which implements agriculture programs worth $431 million, said in a statement that it has not yet begun demobilizing and is working "to seek a mutually satisfactory conclusion to this critical issue."

"Terminating contracts and grants is a really delicate process and it takes time," one development specialist in Kabul said. "You can't do this overnight."

Aid workers and development executives agreed to discuss the issue because they believe public attention will increase pressure on the Afghan government to reverse its position.

The bulk of the shutdown will commence Nov. 1, when firms lay off local staff, terminate subcontractors and shut provincial offices, U.S. officials and development firm representatives said. After that point, several officials said, it will be difficult to restart programs without significant delays.

Of particular concern to U.S. and NATO military officials is the effect of a shutdown on counterinsurgency operations in Kandahar province, where USAID's agriculture and governance programs are supposed to be implemented immediately after U.S. Army units clear areas of insurgents.

"This is the soft power that works hand in hand with the military's hard power," another development executive said. "You can't do counterinsurgency without these programs."

Several Americans involved in the issue said the stakes may become clear to Karzai and other senior Afghan officials only on Dec. 17.

They noted that private security contractors guard the power plant that supplies electricity to Kabul. "That's when the lights are going to go out in this city," one of them said.