Afghanistan war bogs down Indian business hopes

Early on Sunday morning, a bus rattled north out of the small Afghan town of Pul-e Khumri bearing a crew of Indian engineers brought in to repair the power line carrying electricity from Kyrgyzstan and Tajikistan to Kabul. Though the seven engineers were headed into some of Afghanistan’s most-dangerous insurgent-held territory, they had no armed escort: it was safer that way, they’d been told.

In an hour, the seven engineers, all employees of KEC International, were imprisoned in a mud-walled home in the village of Dand-i Shahabuddin, on the outskirt of Pul-e Khumri. There’s no word on when they might be released, or what might be sought as ransom.

For the growing group of Indian companies who have won lucrative infrastructure contracts in Afghanistan and other conflict zones across the world, the story of Pul-e Khumri hostages is a cautionary tale.

Local authorities, Afghan government sources told Business Standard, have begun negotiations with Qari Bakhtiar, who serves as the Taliban’s deputy chief in the Baghlan region, using a committee of village elders and clerics from Dand-i Shahabuddin.

But the governments of India and Afghanistan have almost no real influence in the region, making the hostage negotiation effort extraordinarily fraught.

In addition to KEC, several other Indian power sector companies — Gammon India, KPTL, AIPL and Phoenix —are active in Afghanistan. Aptech, SpiceJet and Air India also have significant commercial operations, and the Indian government is supporting over 130 community-level projects. Bilateral trade has grown to some $800 million — and there is hope that India’s fledgling investments in rail and road links out of Chabahar port in Iran will boost this manifold. Firms across the world operate successfully in not-dissimilar circumstances — but for Indian companies a sharp learning curve lies ahead. “There’s very little capacity in India to do this kind of thing”, a senior intelligence official notes. “There just isn’t the cadre of language specialists, area specialists, or mercenaries”.

The abducted engineers were working from Afghanistan's state-run power firm Da Afghanistan Breshna Sherkat to build the CASA-1000 power line project, linking Pakistan via Afghanistan to Kyrgyzstan and Tajikistan. The project, Afghanistan’s hopes, will bring up to $50 million a year in transit fee.

The engineers were provided 60 guards from the Ministry of Interior-run Afghan Public Protection Force, an industrial organisation set up to protect infrastructure, a spokesperson for Baghlan governor Abdul Hai Nemati said.

In December 2017, just as KEC began work on CASA-1000, Afghan forces backed by the country’s air force began a major new offensive to clear Taliban insurgents from areas around Pul-i Khumri. The operation sparked off bitter clashes that led to the destruction of dozens of homes and a flood of refugees.

Then, in March, Taliban under the command of Qari Bakhtiar retaliated against the assault by blowing up power pylons carrying electricity from central Asia, severing power supplies to Kabul, Ghazni, Maidan Wardak and Nangarhar.

Local police chief Brigadier General Akramuddin Sary despatched troops to the area, Afghan government sources said, but technical personnel declined to work on the pylons, fearing ambush.
Police responded by stepping up pressure on Qari Bakhtiar, local government sources said and detained his son Tariq. The police’s hostage-taking operation led to negotiations involving Dand-i Shahabuddin village elders and clerics. 

In the end, a bizarre compromise was reached. The Taliban agreed to allow work on the power lines to resume in return for injured insurgents being allowed access to medical treatment in Pul-i Khumri. The Taliban were also assured that power would be supplied to villages under their control, including Sang Soragh, Karadak, Alikhel, Zahrabi, Kamra and Dand-i Shahabuddin.

Following the deal, RPG’s engineers were despatched to begin work on the damaged pylons — but, based on advice from local residents government-provided escorts were not sent, fearing it could provoke an attack by the Taliban.

For decades, firms operating in the midst of wars have faced similar situations. Banana companies have paid paramilitary groups in Colombia in the 1990s and 2000s,  rubber companies have funded warlords in Liberia and jewellers have fed the trade in 'blood diamonds' in Congo. 

French-Swiss cement manufacturer LafargeHolcim recently admitted that it resorted to 'unacceptable' practices in 2013 and 2014 to keep its Jalabiya plant in Syria running until it was seized by the Islamic State — in essence, making payoffs to armed groups operating in the area.

However, Afghan government sources said KEC tried to remain aloof from the tangled web of armed actors in Baghlan, relying on its Afghan partners to make key decisions on its behalf. “The strategy clearly didn’t work”, an official said.

Fighting in the Baghlan region has been escalating steadily, as powerful regional warlords Ismail Khan and Muhammad Atta fight off the central government’s efforts to impose its authority. Local warlords like Mustafa Andrabi have stepped their presence, extorting money from travellers on the Baghlan-Balkh highway, linking Kabul to the north, and taxing nomads for the use of high mountain pastures.

From 2015, the Taliban began to displace these militia. That summer, Taliban started establishing checkpoints on the Baghlan-Balkh road, part of a network that links Kabul to Afghanistan’s north. Taxes were imposed on transporters, local businesses, and shepherds using the region’s pastures.

Afghanistan’s intelligence service Riyasat-i Amniyat-i Milli, or National Directorate of Security, fears Bakhtiar’s Taliban unit may be coming under pressure from Pakistan’s Inter-Service Intelligence (ISI) to draw out the kidnapping in a bid to force out Indian power companies from northern Afghanistan, another Afghan government official said.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel