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Construction

THE ROLE OF TRANSPARENCY IN COMBATING MISMANAGEMENT AND CORRUPTION (in Construction) The experience of CoST - Ethiopia April, 2019. Construction. Capital intensive economic sector Absorbs huge share of the capital budget of the country Continue to be the most important economic sector

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Construction

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  1. THE ROLE OF TRANSPARENCYIN COMBATING MISMANAGEMENT AND CORRUPTION (in Construction)The experience of CoST - EthiopiaApril, 2019

  2. Construction • Capital intensive economic sector • Absorbs huge share of the capital budget of the country • Continue to be the most important economic sector • Susceptible to mismanagement and corruption • Involves many stakeholders • Heavily technical in nature • Involves huge volume of transaction • Has lengthy cycle of procurement • Has vast spatial diversification • Has inherited uncertainties These, coupled with frequent reports of cost and time overruns, sparks doubt in the public on value for Money

  3. Value for Money is the critical measuring stick for Procurement Mismanagement and Corruption highly erode the principle of Value for Money

  4. How could we improve / assureValue for Money?To ensure value for money, one should address the full Procurement cycle

  5. Procurement of infrastructure has the following three main phases 1) Pre bid (well addressed Feasibility, Participatory Prioritization, and adequate preparations) 2) Bid (Transparent Bidding process) 3) Post award (Real time disclosure, Design period, … )

  6. Serious consideration for each phase minimizes corruption and mismanagement In the prevailing procurement practice, the three phases are not getting balanced attention (this is the case in most countries) The regulations give emphasis to the bidding stage (5 out of 80)

  7. Perfect Bidding alone is not enough. Pre Bid and Post Award stages need be considered equally to secure Value for Money(showcase, Aggregation Study made by CoST – Ethiopia)

  8. How transparent are our PEs? Construction Sector Transparency Initiative - Ethiopia is working to introduce and strengthen Transparency in the full procurement spectrum 41 major Public Bodies identified by FPPA (32 universities and 9 Federal Institutions) are addressed by the capacity building Program The Assurance Reports (Building, Road, water) show considerable issues of concern

  9. How transparent are our PEs? The attempts to introduce a transparent procurement process is highly challenged • Resistance at different hierarchies • Poor Document and Information Management (deliberate, capacity) • Gaps in the regulatory framework • Poor enforcement capacity of Regulatory bodies

  10. How transparent are our PEs? A pilot disclosure project started two and half years back (two projects from each Procuring Entity) Of the 41 Procuring Entities, only 17 complied (15 universities and 2 other Procuring Entities)

  11. Why emphasis on Transparency?? The five essentials to curb Mismanagement and Corruption (Organization for Economic Cooperation and Development - OECD) • Integrity • Transparency • Participation of Stakeholders • Electronic Procurement • Monitoring and Follow-up Transparency is the x-cutting element

  12. Why emphasis on Transparency?? E=mc2 1) Given the serious implementation problems, our solutions need be simple and effective 2) By how much we understand the problems, by so much our solutions will be simple and effective 3) Introduction of Transparency at all stages of the procurement cycle is the simplest, proactive, most effective and cross cutting instrument to curb mismanagement and corruption

  13. Core Features of CoST • Disclosure • Assurance • Multi-stakeholder working • Social accountability

  14. CoST – Ethiopia: dwelling on reactive and envisaging proactive disclosure Pilot and Full-fledged phases CoST – Ethiopia disclosed 70 projects with total project cost of 5.5 billion USD It made an Aggregation Study for the 52 (25 + 27) projects to see the total image of the individual projects covered by the Assurance Process

  15. Showcase (transparency and Saving) Gindeber – Gobensa Road Construction Project • Record high cost /km • Doubt in the public • CoST – Ethiopia proved that the cost / km was reasonable (rugged terrain) but closely looked the details and recommended changes in the alignment • Triggered saving of USD 3.5 million and construction time of 6 months

  16. Joint Forums for introduction and Sustainability of Proactive Disclosure QMoU • Federal Ethics and Anti-corruption Commission (FEACC); • Office of the Federal Auditor General; • Federal Public Procurement and Property Administration Agency (FPPA); and • Construction Sector Transparency Initiative – Ethiopia (CoST – Ethiopia) Media Forum

  17. Thanks !!!

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