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The CoST Initiative Presented by L. Gideon – Country Manager

Learn about the CoST Initiative, a multi-stakeholder approach to increasing transparency in public infrastructure projects. Discover how CoST promotes disclosure, assurance, and social accountability to ensure value for money and prevent corruption. Find out how transparency leads to better governance and investor confidence.

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The CoST Initiative Presented by L. Gideon – Country Manager

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  1. The CoST InitiativePresented by L. Gideon – Country Manager MALAWI INSTITURE OF ENGINNERS CONFERENCE - MANGOCHI

  2. Introduction The country (Malawi) has a rapidly growing population (now estimated at about 18 million) which lacks adequate infrastructure that supports its social-economic well being in agriculture, education, health, transport, energy and mining; especially in rural areas where 88% of our people live.

  3. Let us make a case • Public sector infrastructure projects make a major contribution to economic growth and poverty reduction. • Up to 30 percent of public budgets is spent on construction, across sectors such as transport, energy, water, health, education and housing. • Such huge investment MUST be safeguarded from mismanagement and corruption which is rampant during the planning, implementation and monitoring of construction projects. • Mismanagement and corruption tend to undermine social and economic benefits that are supposed to be realized from public infrastructure development projects. • Corruption leads to unnecessary, unsuitable, defective and dangerous construction projects, buildings that collapse and roads that break up.

  4. Bangladesh building collapse: 1,127 people perish leaving a trail of shattered lives..! ~ April 24, 2013

  5. A school block that killed four pupils in Zomba in June 2018

  6. What is CoST? CoST is an initiative to improve the value for money spent on public infrastructure by increasing transparency in the delivery of construction projects. It is a multi-stakeholder approach that involves government procuring and disposing entities and oversight agencies, private sector consultants and contractors, and the civil society groups; all working together to improve transparency. CoST works with government, industry and civil society to promote the disclosure, validation and interpretation of data from infrastructure projects. This helps to inform and empower citizens and enables them to hold decision-makers to account. Civil society Industry Government

  7. Essentials of CoST • Disclosure CoST promotes transparency in public construction by ensuring that basic information on projects is disclosed to the public at key points throughout the project cycle. Within participating countries, the goal is to establish a public disclosure process for the construction sector that is viable and appropriate to country conditions, that is sustainable in the medium and long term as a government system, and that achieves a credible and substantial level of compliance in the relevant sector entity. • Assurance Because many different public entities are involved in construction and information on construction projects is substantial and technical, CoST adds an assurance process to validate the disclosed information and interpret it in plain language that helps stakeholders understand the main issues.

  8. Essentials cont’d…. • Social Accountability Stakeholders can then use this knowledge as a basis for holding the responsible parties accountable. CoST can benefit citizens and users of infrastructure services by providing information on project purpose, scope, and location; feasibility and alternatives considered; project quality and safety; impact on land and settlements; delays and overspending; achieving value for money; and misuse of funds. CoST aims to ensure that disclosure stimulates active demand for accountability and that this results in improved performance in the procuring entities and in public construction projects. To catalyse this process, it relies on the demand for transparency from multiple stakeholder groups. It complements and does not replace a country’s supervision, audit, regulatory, investigative, or judicial functions, and it relies on existing oversight bodies to use the information generated.

  9. Principles of CoST CoST principles reflect a shared stakeholder commitment to transparency and accountability and are as follows: • Governments are responsible for providing reliable, safe infrastructure Public sector infrastructure should support sustainable economic growth and development. Mismanagement or corruption during construction undermines social and economic benefits. 2.Governments should be accountable Citizens have a right to know that their money is being used wisely. The implementation of public construction projects should be sufficiently transparent for government to be held accountable.

  10. 3. Transparency improves governance Public disclosure of information during the project cycle can provide an effective way to improve value for money in construction by reducing opportunities for corruption and increasing scrutiny. 4. Transparency promotes investor confidence Domestic and foreign direct investment is likely to be increased by transparency in the management of construction projects. 5. Multi-stakeholder cooperation reflects shared interest and responsibility Multi-stakeholder working between the public and private sectors and civil society improves transparency and builds confidence that all points of view are being taken into account.

  11. Legal Framework for IDS Disclosure in Malawi • (2) A procuring and disposing entity shall disclose to any party with an interest in the procurement or, disposal process, during and after the procurement or disposal proceedings, all the information which may materially affect the implementation of the procurement or disposal process as prescribed in the regulations. • (3) A procuring entity carrying out a procurement for works or consultancy services in the construction industry shall disclose all material project information and shall comply with the principles of transparency and accountability at all stages of the project life cycle inclusive of pre-contract and post-contract process as prescribed in the regulations.

  12. Policy on Good Corporate Governance The NCI Policy which was launched in June 2015 has a priority area on Good Corporate Governance which aims at: • Promoting adherence to principles of good corporate governance; • Promoting establishment of sector implementation agencies to manage government construction projects; • Ensuring that construction players and stakeholders adhere to relevant regulations in procurement, design and contract administration; and • Ensuring the adoption and promotion of principles of transparency and accountability in the inception, design, procurement and implementation of projects.

  13. What is disclosed?

  14. IDS Cont’d…

  15. Challenges in public infrastructure management Project identificationProject planningProcurement Poor scoping Over-design Incomplete bid Poor estimates Poor constructability documents Poor estimates Poor estimates Poor contracting Budget based on Scope creep strategy incomplete data Insufficient competition Fraud in the bid process Implementation Project completion Change orders Punch list issues Delays Insufficient time for Quality concerns testing & commissioning

  16. Benefits of disclosure • Enhances accountability of procuring entities and contractors for the cost and quality of public sector construction projects through strengthened accountability mechanisms. • Strengthened governance of public construction projects. • Leads to greater efficiency of public procurement of infrastructure projects, which in turn leads to higher quality infrastructure at lower cost. • Companies will enjoy reduced risk to their reputation from association with projects or enterprises where corrupt practices are suspected. • Leads to improved professional standards • Greater public confidence in government and the procurement process. • Help in tackling corruption will encourage more contractors to bid and lead to fairer prices and higher quality projects with higher economic and social returns.

  17. Malawi must run… “Every morning in Africa, a gazelle wakes up, it knows it must outrun the fastest lion or it will be killed. Every morning in Africa, a lion wakes up. It knows it must run faster than the slowest gazelle, or it will starve. It doesn't matter whether you're the lion or a gazelle-when the sun comes up, you'd better be running.” - Christopher McDougall, Born to Run: A Hidden Tribe, Supper athletes, and Greatest Race the World Has Never Seen

  18. China does it in 19 day!!!

  19. Control Tower in Dar Es Salaam Singapore!!!!

  20. END OF PRESENTATION

  21. Questions, Answers & Comments

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