June 2013



Industry leaders urge G8 to back CoST

A letter from industry leaders urging G8 to back CoST has been published in a number of media outlets. It is reproduced here in full.


Industry body says it’s time to scale-up CoST
 

“It is time to extend the benefits of CoST beyond the nine countries currently participating to include many more. This applies to high income countries as much as it does low and middle income countries.”  This is the view of Geoff French, President of the International Federation of Consulting Engineers (FIDIC), writing in a guest blogfor CoST entitled ‘Construction Transparency: Time to scale-up’.

Mr. French goes on to say that: “The UK is currently the only G8 country that is directly involved in CoST. It is to be hoped that after the G8 summit later this month, more G8 members will support the programme and this should include practical commitments to improve transparency and accountability in their own construction sectors.”

FIDIC is the global body representing the engineering consulting industry. Read the blog 
here.


 
CoST shares lessons with Water Integrity Network

Speaking at a Water Integrity Forum in Delft recently, CoST Chairman Chrik Poortman urged the participants to recommend that every government and government agency provide full disclosure and distribution of basic information for all public sector water projects. Mr Poortman, who is also a Senior Adviser at Transparency International, was one of a group of keynote speakers that included Betty Oyella Bigombe, Minister of State for Water in the Ugandan Government.


 
CoST delivering results in Guatemala
 

Writing for the Financial Times recently, Verónica Taracena, Guatemala’s Presidential Commissioner of Transparency and E Government reflected on the latest round of information disclosure in Guatemala and said: “having systems to disclose key information in public construction projects at all stages and ensuring that these are institutionalised would, arguably, never have come about without CoST.” The full blog (registration required) can be read here.


 
CoST financial needs identified

Guardian journalist Claire Provost has drawn attention to the need for investment in CoST if its benefits are to be
extended to the new countries that are keen to join. Writing for The Guardian online she points out that: “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.”

Commenting on the article, CoST Executive Director Petter Matthews said: “there appears to be a disparity between the demand from new countries wishing to join CoST on the one hand, and the willingness of donors to invest the resources that are needed to meet that demand on the other. However, we remain optimistic about the future of the programme. CoST Ethiopia recently saved $3.7 on a single project and that is the type of impact that donors are looking for.” The article can be read 
here.


 
Tanzanian procuring entities need better disclosure systems

A detailed study of Tanzanian procuring entities (PEs) has revealed that systems and procedures for the disclosure of information need strengthening. The study looked in detail at the Tanzania National Roads Agency and the Ministry of Health and Social Welfare. The report concludes: “[t]he CoST agenda and mission is still relevant and needed to enable PEs organize information and key data with appropriate legal and institutional frame work put in place.”

As part of the study, information was collected from the construction of two roads and the rehabilitation of two health centres. For the first time, health and safety statistics were disclosed which revealed a total of five on-site deaths from the two road projects. Consideration is now being considered to including health and safety statistics in the standard list of CoST Project Information. The report can be read 
hereand the disclosures from the four projects can be downloaded here.


 
El Salvador Joins CoST to intensify its fight against corruption

El Salvador is the first new country to join CoST since the launch of its international programme late last year.

At a recent press conference in San Salvador, Gerson Martinez Minister of Public Works and John Hawkins, Programme Manager CoST International Secretariat signed a Memorandum of Understanding that commits the Ministry of Public Works, Transport and Housing to disclosing information on at least three high profile construction projects over the next 18 months. It is then anticipated that this programme will be expanded to other public investment projects carried out by the Ministry and the Highway Conservation Fund. The Ministry has also agreed to establish a multi-stakeholder group with the participation of the private sector and civil society to lead the development of CoST El Salvador.

In 2009, the EL Salvador Ministry of Public Works had debts of $43m with 80% of its contracts paralysed by legal problems. Since then it has embarked on a reform programme based on the principles of transparency and ethical behaviour, with the result that the number of law suits against the Ministry has reduced to zero in the last 4 years under the leadership of Minister Martinez.

Gerson Martinez, Minister of Public Works, has been working to ensure that the country meets the criteria to become a member of the initiative, and believes that being a part of it will be a boon to the country's development: 'I am delighted that we can now officially announce our membership of CoST. Our commitment to CoST is an important next step in getting better outcomes from our investment in public infrastructure. We are proud to stand alongside the founder CoST countries, and look forward to seeing the positive impact within our own economy for our citizens.'

Christiaan Poortman, Chair of the CoST Board, said: ‘’I warmly welcome El Salvador to CoST. CoST has proved adaptable in diverse environments and I’m certain that it will further strengthen the measures that Minister Martinez has already put in place. As CoST continues to expand, each new member country will be able to learn from and share experiences with others, shaping the systems and processes to meet their precise needs. I know that El Salvador will help to play an important part in this'.


 
CoST in the media

With media interest in transparency being heightened ahead of the G8, CoST has received attention in a number of articles in addition to those mentioned above. CoST Civil Society Adviser and Integrity Action Programme Director Claire Schoutendiscusses CoST in the context of How to be transparent for Guardian online. Also for Guardian online CoST Board member Vincent Lazatin writes about Transparency in the Philippines and CoST Executive Director Petter Matthews participated in an online debate entitled Transparency: more than a tick-box exercise? For Thomson ReutersAlan Hudson of ONE makes reference to CoST in the context of ensuring data is used effectively and Stella Dawson refers to CoST in the context of new EU legislation requiring transparency in the extractives sector. And finally publicservice.co.ukreproduced the letter from industry leaders reported above.

Global Construction Review reported the launch of the CoST El Salvador programme in the context of on-going efforts by the Ministry of Public Works to improve efficiency. Writing for Thomson Reuters, Kizito Makoye discussed CoST Tanzania in an article about a tragic building collapse in Dar es Salaam. Also writing for Reuters, Stella Dawson reported on an interview with CoST Chairman Chrik Poortman. Finally The Construction Index quoted CoST Executive Director Petter Matthews, in an article about a second tragic building collapse, this time in Dhaka.

 
Capacity building report reveals extent of cost saving in Ethiopia


report recently published by CoST reveals a $3.7m cost saving on a rural road project in Ethiopia. The saving
was highlighted in a report that assesses the requirements for mainstreaming proactive information disclosure by procuring entities in Ethiopia. As part of the exercise information from 9 construction projects was disclosed. 

During the pilot, CoST Ethiopia revealed a number of causes for concern relating to the amount of excavation on the Gindeber to Gobensa Road Project which led to the Ethiopian Roads Authority commissioning a new design. Disclosing information on a regular basis during the life of a construction project is an important feature of CoST. On this particular 
project disclosing information for a second time demonstrates that the new design has saved $3.7m.

The 
report also assessed the policies, procedures and systems that would allow the Ethiopian Roads Authority and the Ministry of Water and Energy to disclose CoST project information across their construction programmes on an on-going basis. It highlighted that ERA is in a good position to mainstream information disclosure due the development of a new database and a number of disclosure policies that are already in place. In comparison, the Ministry of Water and Energy has a largely paper based information management system with no disclosure policies in place.

The 
report goes on to make a number of recommendations for both organisations including developing a uniform mechanism for referencing and indexing of projects documents, and electronic document and record management system and a system to centrally monitor storage of electronic and printed documents and records. It also highlights the importance of identifying staff and resources for implementing information disclosure.

The CoST Ethiopia MSG will be incorporating the findings of the report into a procuring entity training programme on information disclosure which is expected to start later this year.  


 
CoST Guatemala recommends changes to the legal framework for state contracts
 

CoST Guatemala has recommended that the legal framework for state contracts is changed to reflect the CoST disclosure requirements. The recommendation is one of a series included in CoST Guatemala’s third assurance report.

The report measured the compliance of the participating procuring entities on the disclosure of 31 indicators of project information. It also analysed the information disclosed on 25 construction projects including road improvements, housing schemes, schools and community sport facilities over a period of six months. Eight of these projects had been initially examined in the previous assurance reports.

The report found that on average 54% of CoST project information was disclosed on the 25 projects. This has led to CoST Guatemala recommending that the legal framework for state contracts is amended so that the publication of the thirty-one indicators required by CoST is included under Guatemalan law.
In addition, the report recommends that

  • Projects contracted under the repealed Procurement and Contracting Law are revised so that they meet the requirements of listing and bidding processes established by the State Procurement Law.
  • Projects are designed with integral and long-term vision generating the greatest social benefit and ensure the sustainability of the work.
  • The implementation of transparent procedures to procure works in emergency situations that follow international standards models.
  • Budget allocation for public works projects is included.

The full report in Spanish is available from the CoST Guatemala website.


 
Time to join the dots on transparency

The G8 should put its weight behind existing transparency initiatives, including CoST, but it should also consider how to ensure coherence between existing and new initiatives. This is the view of Jamie Drummond, the Co-Founder and Executive Director of ONE, expressed in a guest blog written for the CoST website. He goes on to say that: “a failure to join the dots on transparency is likely to result in duplication of effort and missed opportunities.” Read the full blog here.


 
CoST appoints new Board Members

The CoST Board recently appointed Professor George Ofori and Mr. Per Nielsen as Directors and Trustees of CoST. Professor Ofori is based at the National University of Singapore where he is Director of the M.Sc. (Environmental Management) programme and Co-Director of the Centre for Project Management and Construction Law. Mr. Nielsen is a leading figure in the international construction industry. In addition to holding a number of senior positions in the private sector, he is a Board member of European International Contractors (EIC). Recent changes to the Board also include Mr. Bob McKittrick who stepped down in April.

Commenting on the changes, CoST Chairman Chrik Poortman said: “we are pleased to welcome George and Per to the Board. Both were involved in the CoST pilot project and I have no doubt that they will strengthen our governance and help us to scale-up the programme. And we are indebted to Bob for his service to CoST. He has been involved since the earliest stages and I’m pleased that he will continue to Chair of the UK MSG.”


 
CoST awarded charitable status

CoST has achieved charitable status and has been entered onto the UK Register of Charities with the Registered Charity Number 1152236. 

Date Published: 9 December 2013
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