We focus on transparency across the entire infrastructure sector but not on specific projects - Interview with CoST manager

John Hawkins, CoST Programme Manager, tells about the differences between CoST work in Ukraine and in other countries, and what amount was saved thanks to activity of the initiative.
Olga Bystritska 31 August 2016 09:53

CoST initiative consists of 15 countries; many of them such as Afghanistan, Botswana, Honduras and Vietnam are not successful ones with a high level of corruption. CoST also works in Ukraine. We asked John Hawkins, CoST Programme Manager, about the differences between CoST work in Ukraine and in other countries, and what amount was saved thanks to activity of the initiative.

How much money CoST saves per year?

CoST seeks to create a systemic change in the management of public infrastructure investment by increasing transparency and accountability. Our work supports both quantitative and qualitative improvements in the delivery of public infrastructure, with key examples of project savings highlighted below. However, it is not possible to give an account of annual savings that reflects the full scope of our impact.

What is the maximum amount of money which has been saved? In what project and in which country?

Key financial savings generated from CoST action on public infrastructure projects include:

US$5 million saving on the Belize Bridge in Guatemala City, after CoST Guatemala’s Assurance Team highlighted the inappropriate use of emergency procedures for awarding the contract (emergency procedures are intended only for circumstances that require a rapid response, such as reconstruction after natural disasters). The Assurance Team also identified that the bridge did not require rehabilitation and that the planned work could have made the bridge dangerous.

US$3.5 million saving on a rural road in Eastern Ethiopia, following CoST Ethiopia’s Assurance Team reporting that original plans exaggerated the volume of retaining wall and excavation required for the project.

Are principles of CoST the same in all countries or are there any differences, peculiarities in each country?

The CoST principles are the same for each country. CoST then comprises three core features which provide a global standard for transparency and accountability in the delivery of public infrastructure:

●     Disclosure – CoST increases transparency by disclosing data on public infrastructure projects.

●     Assurance – CoST promotes accountability through an independent review of the disclosed data.

●     Multi-stakeholder working – CoST provides a neutral forum for collaboration, with each CoST country being directed by a Multi-Stakeholder Group (MSG) that comprises representatives of government, the private sector and civil society.

However, this standard is flexible to recognise the various contexts in which CoST operates. National programmes are locally led and managed, adapting and applying the core features of CoST according to the local legal, institutional, sector and cultural environment.

What specificity of CoST Ukraine can you mention?

Through a Scoping Study to assess how CoST could be applied to meet the needs of the Ukrainian context, it was identified that Ukravtodor (Ukrainian State Road Agency leading disclosure within CoST Ukraine) had sound procedures and practices for information disclosure largely consistent with the domestic legal requirements. However, disclosure was not regular or systematic and there was no consistent mechanism for civil society monitoring of Ukravtodor’s actions and spending.

The work of CoST Ukraine therefore has a greater focus on institutionalising systematic transparency and openness within Ukravtodor. Furthermore, a Multi-Stakeholder Group has been established to ensure that civil society has an opportunity to contribute to the delivery of better value public infrastructure.

How much money is spent on maintenance of different CoST offices/National Secretariats?

In each member country, an elected Multi-Stakeholder Group (MSG) oversees the CoST activities undertaken through a National Secretariat. Often a host organisation, such as a construction industry council, professional body or government oversight authority, manages the CoST programme on behalf of the MSG in a non-profit capacity; alternatively, a country programme is established as a non-profit legal entity. The programme implementation costs, covering disclosure, assurance and multi-stakeholder working, vary from country-to-country based on a variety of factors but are on average £100,000 per annum. Member countries can from time to time apply to the International Secretariat for grant funding to cover the operational costs required to implement a CoST programme; the majority of countries also work with national, bilateral and multilateral donors to increase their impact.

In which industries projects are the most difficult to control?

As highlighted in the CoST Briefing Notes, one of the features of construction that makes it particularly prone to corruption is its complex project cycle. This provides opportunities to inflate costs and conceal bribes. From dams to airports and railways, these projects are essential to not only the prosperity but also survival of citizens. Yet with costs often of tens of billions of dollars, it is essential that we focus on increasing transparency and accountability across the entire infrastructure sector as oppose to focusing on specific projects.

In what countries does CoST work? By what principle were they selected? And why Ukraine has been chosen to join?

Launched in 2012, CoST has 15 participating countries spanning four continents: Afghanistan, Botswana, El Salvador, Ethiopia, Guatemala, Honduras, Malawi, Philippines, Tanzania, Thailand, Uganda, Ukraine, United Kingdom, Vietnam, Zambia.

Prospective member countries must apply to the International Secretariat, outlining their commitment to implementing disclosure processes in order to raise transparency and accountability standards in public infrastructure. Applications must outline pledges from at least one public infrastructure procuring entity to participate in the initial implementation of the programme and support from private sector and civil society.

Ukraine was the twelfth country to join CoST, following a multi-stakeholder workshop where representatives from government, industry and civil society expressed a strong determination to improve the efficiency and accountability of investments in public infrastructure. The workshop was convened by the World Bank country office, who support Ukraine’s membership to CoST believing it will play a vital role in driving greater transparency in the public infrastructure sector.

How do you see the further development of CoST in Ukraine?

Following the design of a Disclosure Manual, CoST Ukraine has now begun disclosing information from four pilot projects. Moving from transparency to accountability, CoST Ukraine has begun their first Assurance process to highlight key issues of concern. The findings from the assurance report will be used to work with stakeholders to ensure the delivery of better value public infrastructure. In the longer term, CoST Ukraine is working with a variety of partners to increase the scope of disclosure and institutionalise transparency within public infrastructure.

Are the corruption schemes alike in all countries? If not, what are the differences between Ukraine and other countries?

Corruption is a global problem that is not unique to the infrastructure sector. It is highly influenced by local contexts and as such, CoST operates a global standard that remains flexible to local requirements.