CoST Ukraine: First assurance report endorsed by President and Minister
CoST Ukraine has launched its first assurance report, analysing over 120 public road reparation contracts across 17 regions. Representing more than UAH 3,399 billion (GBP£90 million), it is a huge step forwards for transparency and accountability in Ukraine’s infrastructure sector. In 2016, UAH 10.3 billion was allocated overall for financing the road sector so the assurance process encompasses a significant proportion of road infrastructure investment.
The assurance report identifies a number of challenges in Ukraine’s road sector across both the quantitative and qualitative results of its procurement. These include:
Lack of competition in the market – in three regions, one company won all relevant tenders;
Lack of justification for funding distribution – almost 50% of the allocated funds for road repairs were provided to just five out of the 17 regions;
Poor quality works – simple requirements such as smoothness and durability were not met, representing an inefficient use of budgetary funds;
Discrepancies across pricing – average prices of repairs for one kilometre of road varied considerably across the different regions.
The report contains a number of recommendations to address these concerns and deliver better value infrastructure. These include: development and adoption of standard forms of tender documentation; review of the pricing and resource planning rules; greater disclosure of project information on official PE websites.
High-level representatives from across government, industry and civil society came together at the report’s launch to recognise CoST Ukraine’s achievements in increasing transparency and discuss how to take the findings forward.
Petro Poroshenko, President of Ukraine, said: “A comprehensive set of activities means we are going to build so much with 30 billion which we were unable to build with 50 billion in the past. And this is truly important. This is why I emphasise that we should announce the year of 2017 as the year of road construction in Ukraine.”
Volodymyr Omelyan, Minister of Infrastructure in Ukraine, said: “We are ready for criticism. We assessed the barriers. Now, it is very important for us to find viable solutions. First of all, the industry’s dated standards and requirements must be changed. Secondly, free competition in the road works market must be ensured.”
CoST Ukraine is working closely with stakeholders to support them in taking forward the recommendations to increase transparency and accountability in public infrastructure. The Minister of Infrastructure has already signed an official order for an additional four infrastructure projects to be covered in CoST Ukraine’s monitoring processes. Furthermore, the Ministry has recommended that CoST Ukraine’s Country Manager, Natalie Forsyuk, join the Technical Committee of Ukravtodor (state road agency) to provide guidance on good governance in public infrastructure investment.
Further information is available via the CoST Ukraine website and stay tuned for updates from the assurance process.