CABRI Policy Dialogue, Kigali, 24-25 August 2017 How CoST can help improve the procurement of public infrastructure Hamish Goldie-Scot @CoSTransparency for the CoST International Secretariat 1
Overview How CoST can help improve the procurement of public infrastructure 1. Introduction to CoST 2. How CoST contributes to improved performance 3. Core features of CoST 4. Examples of CoST in action 5. Examples of transparency improving accountability The aim of this presentation is that participants will understand the basic concepts behind CoST, and be able to apply some simple tools to help identify and address potential procurement risks. @CoSTransparency 2
1. Introduction to CoST 2. How CoST contributes to improved performance 3. Core features of CoST 4. Examples of CoST in action 5. How transparency can help improve accountability 3
What is CoST? CoST is an Infrastructure Transparency Initiative MULTI-STAKEHOLDER: Stakeholders working together to tackle a common challenge DISCLOSURE: ASSURANCE: Publication of key Independent review of project and contract disclosed data data into public highlighting issues in domain plain language Disclosure + Multi-Stakeholder + Assurance => Empowered stakeholders @CoSTransparency 4
How does CoST work? Start: Inefficiency, mismanagement and Better value for money corruption and better quality infrastructure Informed stakeholders and responsive public institutions work together Multi-stakeholder initiative, promoting End: Increased quality disclosure of life for citizens @CoSTransparency 5
Where does CoST fit in? Public governance multi-stakeholder initiatives ➢ CoST complements not duplicates. EITI ➢ CoST collaborates to strengthen impact; OCP OCP GIFT and OGP are strategic partners of CoST. ➢ But CoST is unique as the only initiative CoST focussed on improving public infrastructure OGP governance . CoST is the leading international initiative for developing transparency and accountability in public infrastructure. Source: “Assessing the Evidence: The Effectiveness and Impact of Public Governance- @CoSTransparency 6 Oriented Multi-Stakeholder Initiatives” , Transparency and Accountability Initiative
Who does CoST benefit? Civil Society Industry Government Improved quality of life Value for money in public Level playing field through better infrastructure infrastructure for companies @CoSTransparency 7
Where is CoST applied? Nationally , Internationally , CoST is locally CoST provides led and guidance and managed support @CoSTransparency @CoSTransparency 8
Who can join CoST? Mega projects Procuring Entities Cities State Governments National Governments @CoSTransparency 9
Who is supporting CoST? Current CoST funders Additional strategic partners Previous funders of international and national CoST programmes @CoSTransparency 10
1. Introduction to CoST 2. How CoST contributes to improved performance 3. Core features of CoST 4. Examples of CoST in action 5. How transparency can help improve accountability 12
What is the context? Estimated 10-30% lost through Potential savings of $5 Global construction likely to be worth $15 trillion by 2025 trillion mismanagement & corruption Global Infrastructure Spending Gap: ➢ Globally, need $3.3 trillion/year in economic infrastructure annually through to 2030. ➢ Current trajectory of underinvestment, global gap of roughly 11% or $350 billion a year. @CoSTransparency 12
What drives performance? C apacity A ccountability Makes it possible Makes it happen Finance, staff and equipment Quality Management Clear operating procedures A C Transparency Skills and experience Performance Monitoring T Enabling institutional T rust and legal S etting S Makes it flourish Allows it to continue Shared values and vision Institutional clarity Mutual trust between stakeholders Rule of law fairly applied Confidence in fair contracts and procurement processes Good performance rewarded @CoSTransparency 14
CoST and the procurement cycle 1. Decide what to procure 2. Decide 7. Learn how to lessons procure 3. Invite 6. Manage bids contracts 5. Award 4.Evaluate contracts bids @CoSTransparency 14
1. Introduction to CoST 2. How CoST contributes to improved performance 3. Core features of CoST 4. Examples of CoST in action 5. How transparency can help improve accountability 16
CoST core features: Multi-Stakeholder Working Governments alone cannot address all challenges. CoST is based on multi-stakeholder working . Civil society Government Industry A CoST Multi-Stakeholder Group (MSG) devises the strategy for the country programme. The CoST MSG provides: Leadership Dialogue Trust @CoSTransparency 16
CoST core features: Disclosure CoST increases transparency by disclosing data on public infrastructure projects CoST IDS Disclosure is publication of key project and CoST’s Infrastructure Data contract data into public domain Standard (IDS) supports Data is disclosed proactively and reactively disclosure ➢ 40 data points ➢ Covers entire project Procuring Entities are responsible for disclosure investment cycle Government establish a Formal Disclosure Requirement to mandate disclosure @CoSTransparency 17
CoST core features: Assurance Assurance is the independent review of the disclosed data Validate Interpret into Review Monitor Highlight data plain language further compliance concerns @CoSTransparency 18
Disclosure & Assurance flowchart Procuring Project Proactive Disclosure Entity (PE) Information Multi-Stakeholder Group Reactive Assurance Assurance Disclosure Process Reports Request for Stakeholders information @CoSTransparency 19
1. Introduction to CoST 2. How CoST contributes to improved performance 3. Core features of CoST 4. Examples of CoST in action 5. How transparency can help improve accountability
CoST Honduras: SISOCS Disclosure Portal @CoSTransparency 21
Assurance case study – Ukraine ➢ Data from 3 donor funded road projects and 1 nationally funded road repair programme consisting of 140 contracts were analysed. ➢ Issues of concern included: ➢ Incomplete design leads to variations and cost increases; ➢ Equipment moved from site for unexplained reasons leads to delays and contract termination; ➢ Contracts not applied correctly; ➢ Low market competition; and ➢ Budgeting for the annual road repair programme is incomplete and not prepared in a consistent manner. 22 @CoSTransparency
Assurance case study – Ukraine CoST Ukraine assurance infographic • Findings from assurance process, incl. review of over 100 projects, compiled into one brochure . • At sector level, statistics are translated into visual representations. • Key conclusions and recommendations extracted from lengthier report Infographic is: Accessible & engaging • – Short Direct messaging for all stakeholders: accessible for range of audiences Ukraine President publicises • Visual – ensuring complex data infographic to show findings is broken down is understandable from latest CoST Ukraine • Engaging – highlights key points assurance of concern in new format @CoSTransparency 23
1. Introduction to CoST 2. How CoST contributes to improved performance 3. Core features of CoST 4. Examples of CoST in action 5. How transparency can help improve accountability
Accountability mechanisms There are many existing accountability mechanisms, including: ➢ Internal management systems of private companies; ➢ Contracts entered into by private companies; ➢ Official management systems and related safeguards; ➢ Official Audit functions; and ➢ Official Monitoring and Evaluation functions. The aim of CoST and its Assurance process is to help strengthen existing accountability mechanisms, not to cut across or replace them @CoSTransparency 25
Accountability mechanisms Contractor Supervising Engineer (responds to market) Outcome Professional in Competent in Supervision Construction a a r r r a a r @CoSTransparency 26
Tanzania Case Study: Turning data into information @CoSTransparency 27
Dye added to project fuel supplies Litres diesel per km of new road constructed Benin Case Study: Turning data into information …… . ..then taking appropriate action Jan 84 Feb 84 Mar 84 Apr 84 May 84 Jun 84 Jul 84 Aug 84 Sep 84 Oct 84 Nov 84 Dec 84 28 @CoSTransparency
Cost per km of standard District road 70000 60000 Uganda 50000 Case Study: 40000 US$ 30000 Turning data into information …… . 20000 ..then taking 10000 appropriate action 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 District Reference @CoSTransparency 29
What drives performance? C apacity A ccountability Makes it possible Makes it happen A C T Enabling institutional T rust and legal S etting S Makes it flourish Allows it to continue @CoSTransparency 14
Thank you CoST@constructiontransparency.org Hamish@engineeringoutcomes.org @CoSTransparency 31
www.constructiontransparency.org cost@constructiontransparency.org CoST International @CoSTransparency Construction Sector Transparency Initiative (CoST) Construction Sector Transparency Initiative (CoST)
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