Alistair Wray gave an interesting talk in Luxembourg on the Construction Sector Transparency (CoST) initiative.
ICE Luxembourg Local Association members listened to a presentation on the Construction Sector Transparency (CoST) initiative by Alistair Wray FICE on 13th January 2011, following the AGM. A lively debate followed.
The CoST initiative has recently concluded a two year pilot study funded by DFID, with ICE and World Bank support, and it was timely to hear of the outcomes and plans for the future. CoST seeks to tackle perceptions of corruption in the industry, notably in public works construction, and promotes the concept of "Getting what you pay for" through the routine disclosure of project information into the public domain. The initiative draws on the experience of the Extractive Industries Transparency Initiative, although there are important differences.
The pilot phase included 8 countries representing Africa, Latin America and South East Asia, along with the UK. It involved establishing baselines on current levels of disclosure, including legal requirements, reviewing performance on a total of 145 projects and verification by assurance teams. Perhaps unsurprisingly, given recent procurement guidelines and reforms, most information released relates to the tender process and contract award, with much less information made available on the early stages of project selection and later stage of implementation.
The cost and time overruns were found to be prevalent in the sample of projects reviewed which highlights the importance of disclosure during the later stages of the project cycle to respond to the "Getting what you pay for" concept. Surprising was the limited understanding of legal disclosure requirements by procuring entities, and the finding that everywhere disclosure falls short of even the limited legal requirements. Disclosure is made the more challenging by poor document management within many procuring entities, the need to distil complex information in a digestible form and generate public demand and understanding for this type of information. Political support was also clearly important as was the engagement of a broad range of stakeholders, and an understanding of the public good characteristics of CoST related disclosure as opposed to accusations or speculative claims.
The questions and discussions underlined the value of project information disclosure, especially during the implementation stage as a supplement to routine project monitoring, which itself is often found wanting. It was also important to have the necessary legal framework in place that promotes access to the relevant information and to see this initiative as complementary to other measures such as procurement procedures and open competition. The approach was appropriate to service contracts as well as to works contracts.
Based upon the CoST pilot findings, the intention now is to move towards a global programme for transparency in construction. This programme, to be led by the World Bank, will include country assessments on request and support measures as well as a certification procedure to roll out the "Get what you pay for" approach.