1. THE ROLE OF TRANSPARENCY IN COMBATING MISMANAGEMENT AND CORRUPTION (in Construction) The experience of CoST - Ethiopia April, 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 / assure Value for Money
How could we improve / assure Value 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
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. Pilot and Full-fledged phases
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 ( ) 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 !!!