The huge expense highlights some of the endemic problems that have plagued US aid to Afghanistan in the wake of the 2001 American-led invasion.
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In a scathing letter to Defense Secretary Ashton Carter, Special Inspector General for Afghanistan Reconstruction John Sopko complained of the project's "exorbitant cost to US taxpayers."
"In comparison, SIGAR found that a CNG station in Pakistan costs no more than $500,000 to construct."
And the inspector general said the US military's Task Force for Stability and Business Operations failed to conduct a feasibility study before starting construction.
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"If TFBSO had conducted a feasibility study of the project, the Task Force might have noted that Afghanistan lacks the natural gas transmission and local distribution infrastructure necessary to support a viable market for CNG vehicles," Sopko added in his letter.
"One of the most troubling aspects of this project is that the Department of Defense claims that it is unable to provide an explanation for the high cost of the project or to answer any other questions concerning its planning, implementation or outcome."
An outraged Senator Claire McCaskill, a Democrat who serves on the Senate Armed Services Committee, slammed the "outrageous, wasteful spending."
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"There are few things in this job that literally make my jaw drop," she said in the statement.
"It's hard to imagine a more outrageous waste of money than building an alternative fuel station in a war-torn country that costs 8,000 per cent more than it should, and is too dangerous for a watchdog to verify whether it is even operational."
Since 2012, SIGAR has published 136 reports, identifying more than $1 billion in potential savings, according to spokesperson Warren Ryan.
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The reports offer a powerful illustration of America's huge challenges in improving governance in Afghanistan, despite billions of dollars in US aid poured into the country since 2002.
SIGAR has also launched 538 investigations that have led to 73 arrests, 69 convictions or guilty pleas, and savings of over $500 million.
Among the problems SIGAR has identified as leading to what Ryan called "massive US-sponsored failures" is a failed counternarcotics program that cost more than $8 billion.
There were also half a billion dollars worth of planes "that never could fly and had to be turned into scrap metal," Warren said, as well as a building that "literally melted before your eyes when it rained."
In addition, a half-million-dollar health clinic lacked water and electricity, with newborns being washed in a nearby river instead as a result.
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