May 2012

Could corruption allegations at Euro 2012 have been avoided?

Allegations of corruption that have been made with regard to Euro 2012 are shocking, but not necessarily surprising. They follow a long line of allegations that have plagued successive Olympic and World Cup events. Calls for a UEFA investigation into construction tenders by Ukraine in the lead up to the championships demonstrate a lack of transparency in the sector as a whole – so what can be done? The Construction Sector Transparency Initiative (CoST), which is now just months away from it's launch, could provide a compelling solution. For more on this story please click here.

CoST Features in Puerto Vallarta G20 Meeting

In April CoST Chairman Christiaan Poortman presented CoST to a High Level Dialogue on Anti-Corruption, Transparency and Business Leadership, that formed part of the G20 Trade Ministers Meeting in Puerto Vallarta, Mexico. The meeting was attended by senior political figures and global industry leaders.

Mr Poortman drew on the experience of the CoST pilot project to demonstrate how Multi-stakeholder initiatives can help deliver practical benefits for all those involved. He also described the CoST Global Programme and explained how it can help to improve the business environment and encourage inward investment.

Whilst in Puerto Vallarta Mr Poortman also addressed a Partnership Against Corruption Initiative (PACI) Task Force Meeting organised by the World Economic Forum. He explained to participants that although CoST can help to create a business environment in which corruption is less likely to occur, it tends to focus on working with national partners to deliver positive improvements in management capacity, efficiency and value for money.

The invitation to attend the Puerto Vallarta meeting came after the G20 endorsed CoST at its Cannes Summit in November 2011. 

CoST at the 22nd World Economic Forum on Africa

CoST was recently invited to participate in a roundtable meeting on ‘Strategic Infrastructure: African Context’ in Addis Ababa. The meeting considered project preparation processes, local industry development and innovative public private partnership models. Also involved in the discussions were Dr Shamsuddeen Usman, Minister of Economic Planning of Nigeria and Pedro Rodrigues de Almeida, Head of Infrastructure & Urban Development Industries at the World Economic Forum.

CoST was represented by its Vice Chairman Professor George Ofori who said after the meeting: “the World Economic Forum recognises that investing in infrastructure and services is key to Africa’s development. It also recognises that improving transparency and accountability in the delivery of infrastructure, through initiatives such as CoST, is vital to improving the value for money obtained from those investments. The need for transparency in procurement and contract administration of infrastructure projects was one of the major conclusions of the meeting."

Interim Board Finalises Design of Global Programme

The CoST Interim Board will meet in May to finalise the design of the CoST global programme. The design draws on lessons from the three year pilot project and the experiences of eight national CoST programmes.

Commenting on the design, Director of the CoST International Secretariat Petter Matthews explained: “the global programme draws two important lessons from the pilot project. First, we have ensured that the international institutional arrangements are very lean, reducing overheads and bureaucratic procedures as far as possible and putting the responsibility for electing the CoST Board in the hands of the participating countries and international stakeholders. Second, we will introduce a ‘Construction Transparency Index’ that will enable participating countries to report against an uncomplicated series of indices. This index will demonstrate progress over time and allow international comparisons."

The CoST global programme will be launched later this year, please check back for further information as it becomes available.

CoST Forging Links with Mexico

CoST recently participated in a conference on Integrity in Public Procurement, co-organised by the Mexican Department of Public Administration, World Bank and Inter-American Development Bank. Speaking after the event CoST Chairman Christiaan Poortman said: “Mexico has made great strides in developing its public procurement system. It maintains a comprehensive database on all public projects, including infrastructure, which it uses for purposes of cost benchmarking and standard setting. The officials I met were enthusiastic about CoST and we agreed to continue the dialogue established during this trip.”

CoST Malawi Receives Parliamentary Committee Support

The Malawi Parliamentary Committee for Transport and Public Infrastructure has agreed to throw its weight behind the CoST Malawi programme.

The CoST Malawi MSG requested the Parliamentary Committee back the Initiative by supporting the inclusion of the CoST disclosure requirements in the Public Procurement Act. The 3 year CoST pilot identified that current disclosure requirements are contained in procurement legislation but are limited to the procurement phase. CoST requires disclosure of information throughout the project cycle from inception to completion.

The MSG also requested that the Parliamentarians assist in persuading Government Ministries and Departments to participate in CoST and help secure funding for the CoST Malawi programme.

In his closing remarks the Chairperson of the Committee Hon. John Zingale assured the CoST Malawi team that the Committee will do everything to push the CoST agenda and its merits as widely as possible.

UK Government Commits to CoST Action by Autumn 2013

The UK Government has committed to considering the options for embedding the use of CoST or similar means of reporting on outturn performance, for publication on clients’ websites and/or a CoST portal by autumn 2013.

In its first 
Infrastructure Cost Review annual report the Government stated that it will work with industry in considering the next steps to extending the CoST demonstration projects and will publish the first wave of project reports.

The initial demonstration projects with the Highways Agency were the first to test the new CoST template for collating information from publicly funded construction projects. The UK Government believes testing this standardised approach is important for collecting outturn performance and cost data on a range of infrastructure projects.

The approach was tested on a hard shoulder improvement scheme on the M1 between Luton and Bedford, a viaduct replacement scheme on the M1 in Leicestershire, and a viaduct strengthening scheme on the M53 near Liverpool. The CoST template will shortly be made available on the CoST website.

Vietnamese Prime Minister Supports Next Phase of CoST

An 8 month ‘Bridging Phase’ was recently approved by the Vietnamese Prime Minister, Nguyễn Tấn Dũng and endorsed by the Ministry of Construction.

Funded by DFID Vietnam, the Bridging Phase will test the modified CoST procedures included in the CoST Global Programme to be launched later this year. The modifications based on lessons learnt from a successful 3 year pilot including a simplified disclosure process.

The Bridging Phase also includes a formal programme design and funding proposal for the succeeding “Roll-out Phase”. The Roll-out Phase will be a broad 3-year program starting in 2013, intended to provide the substantive evidence of viability and impact needed to support formal regulation and mainstreaming by the Government.

Two disclosures of project information are planned for the Bridging Phase in June and September with the aim of establishing a quarterly disclosure cycle. The regular disclosure of project information throughout the project cycle is core to CoST. Workshops presenting mid-term and final results of the CoST Bridging Phase are expected in August and November respectively.

ICE Paper Available to CoST Supporters

The Institution of Civil Engineers, an international qualifying body for civil engineers and host of the CoST UK Multi-Stakeholder Group, recently published a peer reviewed paper on CoST in its Proceedings. First published in 1837, ICE Proceedings represent the highest standards of research and best-practice in civil engineering.

The paper explains why the CoST is of importance to not only the public, who fund the procurement of public sector construction projects through rates and taxes, but also to construction professionals and the organisations they work for worldwide. It explains the concepts of the multi-stakeholder approach and disclosure, and highlights the findings and lessons from the pilots.

The paper was authored by John Hawkins, CoST Programme Manager and formerly of Manager, Management Procurement and Law at the ICE and Bob McKittrick, Fellow of the Institution of Civil Engineers and CoST Interim Board Member.

Electronic access to an ICE Proceedings paper is usually only available for £18. CoST has obtained permission to distribute the paper to its supporters without charge. Please 
email John Hawkins if you would like to receive a copy.

Collaboration with WBI & GIZ

The World Bank Institute and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) are covening a meeting in May to explore collaboration around ‘Open Contracting’, which refers to the norms, practices and methodologies for increased transparency and monitoring in public contracting.

CoST is a supporting partner of the intiative that in addition to infrastructure, will focus on extractive industries and forestry.

CoST in the News and on the Blogosphere

Raana Shah, business analyst for Pakistan’s The News publication, recently made reference to CoST as an example of the type of initiative needed to improve investments in transportation. Click here to read ‘Sleepwalking in Pakistan'.

In a blog for TrustLaw, Graham Gordon, Senior Policy Officer on Governance and Corruption at Tearfund, mentions CoST in the context of the G20 meeting in Puerto Vallarta. He goes on to pose a question that is pertinent to all transparency initiatives: “how these measures bring concrete changes to people’s lives.” 
Click here to read the complete text.

Date Published: 9 December 2013
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