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Lack of funds puts construction transparency programme at risk Lack of funds puts construction transparency programme at risk
(4 months later)
An international transparency programme to tackle mismanagement and corruption in publicly financed construction projects, initially supported by UK aid, is at risk of closure due to lack of funds.An international transparency programme to tackle mismanagement and corruption in publicly financed construction projects, initially supported by UK aid, is at risk of closure due to lack of funds.
The Construction Sector Transparency Initiative (CoST), officially launched in London last October after a three-year £3.4m pilot funded by the UK Department for International Development (DfID), has failed to attract more than $500,000 in funding for the current financial year. CoST estimates it needs at least $4m annually to run and scale-up the programme.The Construction Sector Transparency Initiative (CoST), officially launched in London last October after a three-year £3.4m pilot funded by the UK Department for International Development (DfID), has failed to attract more than $500,000 in funding for the current financial year. CoST estimates it needs at least $4m annually to run and scale-up the programme.
CoST chairman Christiaan Poortman said the initiative will struggle to do more than "keep the wheels turning" unless the endorsements it has received are matched with cash.CoST chairman Christiaan Poortman said the initiative will struggle to do more than "keep the wheels turning" unless the endorsements it has received are matched with cash.
"We will not fold immediately, but in the next six to 12 months that risk is definitely there," said Poortman. "There is a great deal of uncertainty. I think we'd be able to keep the wheels turning for six to 12 months, but without the sort of momentum we're looking for.""We will not fold immediately, but in the next six to 12 months that risk is definitely there," said Poortman. "There is a great deal of uncertainty. I think we'd be able to keep the wheels turning for six to 12 months, but without the sort of momentum we're looking for."
Drawing on the experience of the Extractive Industries Transparency Intitiative (EITI), which monitors the oil, gas, and mineral industries, CoST aims to help clean up the construction of roads, bridges, schools and hospitals by increasing the public disclosure of information about these projects and helping people use that information to hold decision-makers to account.Drawing on the experience of the Extractive Industries Transparency Intitiative (EITI), which monitors the oil, gas, and mineral industries, CoST aims to help clean up the construction of roads, bridges, schools and hospitals by increasing the public disclosure of information about these projects and helping people use that information to hold decision-makers to account.
The construction sector is one of the most valuable globally. By 2020, its size is estimated to reach $12tr annually - up from $7.2tr in 2011. But it's also notorious for corruption and waste, delays, and poor quality. Public works contracts and construction rank bottom of the list – which includes oil, gas, arms and defence industries – on Transparency International's Bribe Payers Index, a measure of how prone to bribery different sectors are perceived to be.The construction sector is one of the most valuable globally. By 2020, its size is estimated to reach $12tr annually - up from $7.2tr in 2011. But it's also notorious for corruption and waste, delays, and poor quality. Public works contracts and construction rank bottom of the list – which includes oil, gas, arms and defence industries – on Transparency International's Bribe Payers Index, a measure of how prone to bribery different sectors are perceived to be.
The fledgling initiative has seen some success. In Guatemala, a project to design and reconstruct the Belize Bridge in Guatemala City was halted after a CoST report uncovered problems with how the contract was awarded. In Ethiopia, the designers of a major road project were suspended for two years by the national roads authority after a CoST investigation.The fledgling initiative has seen some success. In Guatemala, a project to design and reconstruct the Belize Bridge in Guatemala City was halted after a CoST report uncovered problems with how the contract was awarded. In Ethiopia, the designers of a major road project were suspended for two years by the national roads authority after a CoST investigation.
However, CoST's only source of income is a grant of $1.5m from the World Bank over three years, ending in December 2014. Some of CoST's national programmes have found separate funding, but this is limited.However, CoST's only source of income is a grant of $1.5m from the World Bank over three years, ending in December 2014. Some of CoST's national programmes have found separate funding, but this is limited.
In an open letter published on Wednesday, 11 leaders in the international construction industry called on the UK government to use its influence in the G8 to ensure CoST survives.In an open letter published on Wednesday, 11 leaders in the international construction industry called on the UK government to use its influence in the G8 to ensure CoST survives.
"Investing in infrastructure is one of the best ways to stimulate economic growth, create jobs and promote enterprise development. But the positive impacts of these investments often fall short of their full potential as a result of corruption and inefficiency," acknowledges the letter, whose signatories include the presidents of the Royal Institution of Chartered Surveyors, Chartered Institute of Building, and European International Contractors."Investing in infrastructure is one of the best ways to stimulate economic growth, create jobs and promote enterprise development. But the positive impacts of these investments often fall short of their full potential as a result of corruption and inefficiency," acknowledges the letter, whose signatories include the presidents of the Royal Institution of Chartered Surveyors, Chartered Institute of Building, and European International Contractors.
"The UK government showed great vision in launching CoST, and invested close to £3.4m in the pilot project. Given this investment, CoST's widely acclaimed benefits and the number of new countries that are now eager to join, a lack of further financial support would constitute a great missed opportunity. We urge the UK government to use its influence in the G8 to ensure that the programme is given the chance to achieve its full potential.""The UK government showed great vision in launching CoST, and invested close to £3.4m in the pilot project. Given this investment, CoST's widely acclaimed benefits and the number of new countries that are now eager to join, a lack of further financial support would constitute a great missed opportunity. We urge the UK government to use its influence in the G8 to ensure that the programme is given the chance to achieve its full potential."
UK prime minister David Cameron has made tackling corruption a top priority at this year's G8 summit. A special pre-G8 meeting on Saturday will focus on transparency, tax, and trade - key elements of Cameron's "golden thread" of development.UK prime minister David Cameron has made tackling corruption a top priority at this year's G8 summit. A special pre-G8 meeting on Saturday will focus on transparency, tax, and trade - key elements of Cameron's "golden thread" of development.
In a letter to G8 leaders in January, Cameron named CoST as an example of initiatives to bolster transparency.In a letter to G8 leaders in January, Cameron named CoST as an example of initiatives to bolster transparency.
"In our partnership with less developed and emerging economies, I believe we must put a new and practical emphasis on transparency, accountability and open government," he wrote. "We need to look at how to enhance transparency – including through the Construction Sector Transparency Initiative and new ideas like a global land transparency partnership.""In our partnership with less developed and emerging economies, I believe we must put a new and practical emphasis on transparency, accountability and open government," he wrote. "We need to look at how to enhance transparency – including through the Construction Sector Transparency Initiative and new ideas like a global land transparency partnership."
The DfID-funded pilot was carried out in Ethiopia, Malawi, Tanzania, Zambia, Philippines, Vietnam, the UK and Guatemala. All eight remain the core members of CoST, in addition to El Salvador, which joined earlier this year. CoST estimates it costs between $150,000 and $500,000 each year to get a new national programme up and running, depending on the country.The DfID-funded pilot was carried out in Ethiopia, Malawi, Tanzania, Zambia, Philippines, Vietnam, the UK and Guatemala. All eight remain the core members of CoST, in addition to El Salvador, which joined earlier this year. CoST estimates it costs between $150,000 and $500,000 each year to get a new national programme up and running, depending on the country.
"The world is full of initiatives and people rightly want to see proof they work," said Poortman, who acknowledged the importance of UK funding for the CoST pilot as "critical". "People want to see results and we have them now.""The world is full of initiatives and people rightly want to see proof they work," said Poortman, who acknowledged the importance of UK funding for the CoST pilot as "critical". "People want to see results and we have them now."
CoST supporters argue the initiative could provide a critical complement to the EITI. A significiant amount of the money generated through new oil, gas and mineral projects in developing countries will likely go into infrastructure, said Poortman. "We need to look not just at the income side of the equation, but also expenditures."CoST supporters argue the initiative could provide a critical complement to the EITI. A significiant amount of the money generated through new oil, gas and mineral projects in developing countries will likely go into infrastructure, said Poortman. "We need to look not just at the income side of the equation, but also expenditures."
At the launch of CoST last year, Jamie Drummond, co-founder of anti-poverty group ONE, warned that infrastructure was a hard sell. "It is not the bednet that protects the kid from the mosquito, it isn't the vaccination that protects it from everything else....[however] living without access to roads or electricity can mean living without decent education, evening lighting, or medical supplies. It can mean the difference between life and death."At the launch of CoST last year, Jamie Drummond, co-founder of anti-poverty group ONE, warned that infrastructure was a hard sell. "It is not the bednet that protects the kid from the mosquito, it isn't the vaccination that protects it from everything else....[however] living without access to roads or electricity can mean living without decent education, evening lighting, or medical supplies. It can mean the difference between life and death."
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