October 2014

CoST Malawi identifies 262% cost overrun on road scheme

CoST Malawi has identified a 262% or over 3bn Malawi Kwacha (USD 7.4m) cost increase on the rehabilitation of the 
Nkhotakota - Msulira Road. The Ministry of Transport and Public Works has since cancelled the contract on the 33km road due to poor performance.

assurance report showed that recent investments in public infrastructure have been subject to the waste of billions of Malawi Kwacha, with the worst cases being seen in government funded projects.

Assurance is a central tenet of CoST, as it checks the level of compliance with the CoST disclosure requirements and raises issues of concern with the public. Malawi's latest assurance report examined 28 projects, covering the upgrading of over 600km of road, the construction of more than 700 houses and the supply of many kilometres of pipelines and cabling.  Access to all of these is essential to the daily lives of Malawi's citizens.

The report uncovered many cases of delays and suspension of work, particularly within those projects funded by the Malawi government, as opposed to those funded by external donors such as a The World Bank and European Union.  Delays not only cause undue length of time in completing a project, but also lead to further cost overruns.  For example, the erosion of roads during suspension time means that additional work has to be done once the project is finally restarted. 

Joe Ching’ani, CoST Malawi MSG Chair, was realistic about the report's findings: 

The level of waste identified on these infrastructure projects is a bitter pill to swallow.  However, the fact the Ministry of Transport and Public Works has taken action on the Nkhotakota Msulira road demonstrates the value of CoST in helping to open up the process to the public.'

Petter Matthews, Director of CoST's International Secretariat, praised Malawi for its work in bringing the issues to light:

The Ministry of Public Works has acted decisively in stopping this project and preventing further waste. Their actions send a powerful message to those involved in delivering public infrastructure - the waste of public money on such a vast scale will no longer be tolerated. In the longer term, this approach, supported by CoST, will help to create the conditions that prevent such problems occurring in the first place.'

Dutch Government paves the way for greater global transparency with €1M funding

The Dutch Ministry of Foreign Affairs has announced that it will provide €1m ($1.29m) to fund CoST - the global transparency initiative that aims to stamp out corruption and mismanagement in public infrastructure. CoST has the potential to save millions of dollars of public money by 2020.

The newly announced funding represents a contribution to CoST's ambitious business plan. The plan was published in July 2014 as a result of continued and increasing demand for the programme, and a corresponding need to ensure adequate financial support. 

Since the launch of the CoST Global programme in 2012, over $1m has been contributed directly to country programmes by the UK Department for International Development, the World Bank and the African Development Bank, but more is needed. CoST is calling on other bilateral and multilateral agencies to join the Netherlands in ensuring that the demand for CoST is met with additional financial resources. This will allow CoST to extend the benefits of improved transparency and accountability from 13 to at least 22 countries by 2016. 

Dutch Minister for Foreign Trade and Development Cooperation, Lilianne Ploumen, sees her government's contribution as an important contribution to the fight for greater openness and transparency. She said:

CoST has a vital contribution to make in improving transparency and accountability in public infrastructure investment. We are pleased to be able to provide some of the resources that are needed to help it achieve its full potential. CoST will not only save public money, but also ensure that local people have access to infrastructure that is so vital to their daily lives.'

CoST supports and works seamlessly with other global transparency initiatives, such as the Open Government Partnership and Open Contracting. 

CoST Chair, Christiaan Poortman, said that the Dutch involvement was further evidence of the increasing global importance of transparency and accountability in public infrastructure: 

As evidence of the positive impact of improvements in transparency grows, the demand for CoST is increasing. International agencies including the G20 have emphasised the need to reduce corruption in infrastructure, but it has done little to focus on value for money within the sector. This is where CoST adds value. We have seen the benefits of the programme start to take root, resulting in further countries wishing to join the programme. This contribution from the Dutch Ministry of Foreign Affairs will help us meet that need. We welcome their support and urge others to help us reach our objectives.'

Water Boards and journalists awarded in Malawi

Three journalists scooped the CoST Malawi 2014 Media Awards for reporting important issues on public infrastructure projects.

The journalists included Gabriel Kamlomo formerly from Blantyre News Papers Ltd who wrote a story titled 'MK10 billion goes down the drain'; Martin Chiwanda from Malawi News Agency (Mana) with a story titled '4 million classroom blocks face demolishing'; and George Singini from Nation Publications Limited (NPL) author of 'Karonga-Chitipa road completion by November'.

Northern Region Water Board and Southern Water Board were recipients of the CoST Malawi 2014 Procuring Entity Awards for achieving full disclosure compliance in the recent CoST Malawi assurance process. The assurance report also highlighted the low levels of disclosure by the Malawi Roads Authority and the Malawi Housing Cooperation. 

The low level of disclosure by Malawi Housing Cooperation was due to the high level of involvement of Chinese construction companies with many relevant documents are written in Chinese. In these cases, important information could not be extracted by the Assurance team and so remains undisclosed.

Chief Executive Officer for the CoST Malawi host, the National Construction Industry Council, Linda Phiri presented the awards at a- one-day assurance report disclosure workshop organised by the Multi-Stakeholders Group (MSG).

"We have awarded these journalists as they raised important issues on public infrastructure projects which the public has the right to be informed about," said Phiri.

She went on to say, ‘the MSG also believed that it was important to recognise those procuring entities who are complying with the highest standards of transparency. We hope that this will provide an incentive to those procuring entities that need to improve their level of transparency.’

Coordinators undertake professional development

CoST Coordinators recently came to together to share experiences to help meet their professional development needs.

Participants from 11 countries gathered in London recently at a Workshop which aimed to equip them with the skills, knowledge and attitudes they need to effectively manage a CoST programme. The participants benefitted from sharing lessons and experiences of managing a CoST Programme.

CoST Vietnam Coordinator, Phung van Quang said, ‘the workshop was a great opportunity to discuss the challenges and experience Coordinators face on a day to day basis. I was impressed with the progress in Guatemala where they have included the CoST disclosure requirements into law and will shortly be publishing an assurance report on 37 projects. I will be using this example when briefing the CoST Vietnam MSG on my return to Hanoi’.

CoST Programme Manager, John Hawkins said ‘its’ clear that the role of Coordinators has evolved with greater onus on engaging high level government officials, managing the assurance team, engaging the media and developing key policy recommendations. The International Secretariat will be recommending to MSGs that Coordinators should be recognised as Managers in their job title.’ 

The majority of the workshop content was delivered by experienced Coordinators as part of a programme to develop regional technical capacity. 

CoST Policy Advisor, Bernadine Fernz said ‘the International Secretariat is looking to develop its technical capacity so that new countries to CoST can benefit from people who are experienced at establishing and implementing a CoST programme within their region. This will also help us to drive down the costs of providing technical assistance and enable us to provide even better value for money to those who support our work.’ 

Date Published: 9 December 2014
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