President of the Republic of Honduras, Juan Orlando Hernández: "With initiatives like this [CoST], we will not only see money well spent, but also we will transcend the world as a different country"
Prior to CoST: Transparency in public infrastructure
There is significant investment in public infrastructure in Honduras, with 17% of the total government budget allocated to the Ministry of Infrastructure and Public Utilities in 2016 alone.
All public institutions in Honduras must disclose information on these public investments via online portals, in line with the Transparency and Access to Public Information Law.
However prior to CoST intervention, a significant proportion of data related to project and contract information for infrastructure was not being disclosed. As such Honduras has previously fared very poorly in global corruption indices, being placed at 126 out of 174 in the 2014 Transparency International Corruption Perceptions Index.
CoST Honduras: How it began
Supported by Renán Sagastume, the Government’s Presidential Director of Transparency, Honduras' application to CoST was led by the Minister of Infrastructure and Public Utilities, Roberto Ordoñez, in June 2014. A number of civil society and private sector organisations, as well as other public sector institutions, participated in the process and signed a letter of commitment to CoST and its principles. CoST Honduras was launched in August 2014 at the Presidential Palace during Honduras' first National Transparency Week.
At the event, President Juan Orlando Hernández said: "CoST provides an opportunity to save lives, for when corruption occurs lives are put at risk."
CoST Honduras initially undertook a Scoping Study to analyse and assess the legal structure of the country's public infrastructure sector. It also explored the institutions, initiatives and interest groups linked to good governance in the sector and the weaknesses around the contracting and execution of public infrastructure projects. The Study provided a baseline of transparency levels in Honduras, in order to benchmark the progress of the initiative going forward.
Working with stakeholders for better value public infrastructure
The CoST Honduras Multi-Stakeholder Group (MSG) provides leadership and direction for the initiative's implementation. With equal representation from civil society, private sector and Government, the MSG brings together all stakeholders to improve the value, efficiency and effectiveness of public infrastructure. Its members are detailed here:
Civil Society: Asociación para una Sociedad más Justa (ASJ), Espacio Regional de Occidente (EROC) and Fundación Democracia sin Fronteras (FDsF).
Private Sector: Cámara Hondureña de la Industria de la Construcción (CHICO), Colegio de Ingenieros Civiles de Honduras (CHIC) and Asociación Hondureña de Productores de Café (AHPROCAFE).
Government: Gabinete Sectorial de Infraestructura Productiva (GSIP), Dirección Presidencial de Transaprencia y Modernización del Estado (DPTME) and Instituto de Acceso a la Información Pública (IAIP).
To date, the main Procuring Entities (PEs) working with CoST Honduras and its MSG are:
Disclosure: Increasing transparency in public infrastructure investment
- Executing Agency of the CABEI funds;
- Technical Support Unit of the General Directorate of Roads;
- INVEST-H (Executing Agency of the IDB funds);
- Vial Fund (Road Maintenance Agency)
- COALIANZA (Public-Private Partnership (PPP) PE).
CoST increases transparency by ensuring the disclosure of data related to public infrastructure projects and their investments. CoST Honduras is monitoring several disclosure commitments enacted by the Government of Honduras:
- Road projects financed by external funds (December 2014)
- Road projects financed by national funds (June 2015)
- Public Private Partnership projects (December 2015)
- Energy projects (June 2016)
- Telecommunications projects (December 2016)
- Housing projects (December 2016)
Prior to joining CoST, compliance with disclosure was very low at only 27%. CoST Honduras and its MSG raised awareness of the value in transparency around public infrastructure investment, in addition to providing workshops and training to stakeholders to build their capacity in disclosure. Their efforts have seen compliance with disclosure increase from 27% to 84% overall compliance.
In conjunction with the World Bank, CoST Honduras supported the creation and development of SISOCS – a subsystem of the national e-procurement portal, which allows for the disclosure of project information online. Launched in 2015, SISOCS now holds data on over 450 public infrastructure projects. The portal empowers citizens by providing them with instant access to key information on their local public infrastructure projects. Find out more about disclosure in CoST Honduras.
Institutionalising transparency: CoST Honduras Formal Disclosure Requirement (FDR)
In January 2015, the President of Honduras issued an Executive Decree establishing a Formal Disclosure Requirement (FDR) for public infrastructure projects in Honduras. The FDR was a result of the advocacy efforts of CoST Honduras Champion, the Minister of Infrastructure and Public Utilities, Roberto Ordoñez. Going beyond CoST requirements, the FDR requires PEs to proactively disclose all 40 data points in the CoST Infrastructure Data Standard (IDS) as well as an additional 31 data items related to public infrastructure projects via SISOCS.
Assurance: From transparency to accountability
In May 2015, CoST Honduras published their first assurance report featuring 13 road projects. Funded by the World Bank, the Inter-American Development Bank (IDB) and the Central American Bank for Economic Integration (CABEI), the projects had a total budget of approximately US$700 million. The study highlights how CoST Honduras increased transparency in public infrastructure to 84% disclosure over the course of its assurance process.
The MSG also developed a framework for comparative analysis between projects to determine individual project levels of efficiency and effectiveness. This analysis provides a classification of projects from three categories: Red, requiring urgent attention from decision makers; Yellow, requiring closer monitoring by Procuring Entities; and Green, signifying that the project is on track. The Government has committed to taking action on those projects classified as ‘Red’.
In 2016, CoST Honduras published its second assurance report covering 19 projects across the General Directorate of Roads and the Roads Fund. Overall, the assurance process saw disclosure rates increase from 24 to 97 per cent. Several issues were identified including changes in contract value, significant contract extensions and long delays from project design to implementation.
The Minister of Infrastructure, Roberto Ordoñez, praised CoST Honduras for increasing transparency and accountability within public infrastructure and committed to working with the initiative to deliver on its recommendations.
Citizen engagement: Empowering local communities through open data
CoST Honduras has signed an agreement with 90 citizen transparency commissions to increase transparency and accountability in public infrastructure. As part of the agreement CoST Honduras will share information on infrastructure data and assurance, in addition to providing workshop training on SISOCS and social accountability methodologies. As a result of the workshops, a group of citizens in Jesus de Otoro organised their own meeting to discuss the specific infrastructure projects affecting their community. Working together to use the information and support provided by CoST Honduras, they are putting pressure on the contracting authority and local policy-makers to demand better value from local road maintenance works.
From action to impact: Creating lasting change
The General Directorate of Roads (Dirección General de Carreteras, DGC) has established an action plan to make improvements and changes according to CoST Honduras’ assurance recommendations. Furthermore DGC has agreed to work with the CoST Honduras MSG and provide regular updates on its progress regarding these improvements. To date, the process has begun to digitalise all disclosed information on projects as part of the internal control processes and a non-extension to one contract has been announced due to non-justified delays in delivery.
CoST Honduras: Funders
CoST Honduras: Get in touch
For any questions, please contact Evelyn Hernandez, CoST Honduras Country Manager, or use the links below.