The Construction Sector Transparency

Initiative
Petter Matthews
Director, CoST International Secretariat

Structure
International context
Overview of CoST programme
Institutional arrangements
Disclosure

Assurance Process
Multi-Stakeholder Group
Impact examples
Future trends

International Context

Growing global trend towards greater transparency and

accountability.

Launch of a range of international initiatives aimed at improving

the quality of governance and obtaining better value from public
investment.

Renewed emphasis on investing in infrastructure to promote

economic growth and achieve international development goals.

Value of the global construction set to increase to $15 trillion

annually by 2025 or 13.5 per cent of global GDP (Global
Construction 2025).

Mismanagement, inefficiency and corruption accounts for 10 to

30 per cent of a construction project's value (OECD, TI).

Up to $5 trillion of investment could be lost each year by 2025

unless something is done.

CoST is a response to this challenge.

Overview
CoST works with governments, industry and civil society to
disclose information on public investment in infrastructure.
Promotes disclosure of project information with the aim of reducing
mismanagement, inefficiency and corruption and improving
value for money.
CoST pilot project 2008 2011, full international programme
launched in 2012.
Registered in the UK as a not-for-profit organisation. It has a Board
of Directors and an International Secretariat.
Programmes in Afghanistan, El Salvador, Ethiopia, Guatemala,
Malawi, Philippines, United Kingdom, Vietnam, Tanzania, Uganda,
Ukraine and Zambia.
National programmes steered by Multi-Stakeholder Groups
comprising representatives from government, industry and civil
society.

Overview: Results chain

Institutional arrangements
A Multi-Stakeholder group (MSG), with representatives
from government, industry and civil society, oversees the
programme.
A National Secretariat is responsible to run the
programme on a day-to-day basis.
The National Secretariat is located within a Host
Organisation that can employ staff and enter into
contracts.
A good relationship between the MSG and the Host
Organisation is critical to the success of the programme.
The CoST programme could eventually be established as
an independent legal entity.

Disclosure
Government procuring entities (PEs) are responsible for
disclosing information.
If there is no formal/legal requirement to disclose
information, an Interim Disclosure Requirement (IDC) is
established.
Eventually the Government should establish a Formal
Disclosure Requirement (FDR).
Information is disclosed proactively (i.e. on a routine
basis) and reactively (i.e. on request).

PEs respond to questions from stakeholders.

Information for proactive disclosure

Project phase Project information

Contract phase

Contract information

Project
Identification

Project owner
Sector, subsector
Project name
Project Location
Purpose
Project description

Procurement

Project
Preparation

Project Scope (main output)

Environmental impact
Land and settlement impact
Funding sources
Project Budget
Project budget approval date

Procuring entity
Procuring entity contact details
Procurement process
Contract type
Contract status (current)
Number of firms tendering
Cost estimate
Contract administration entity
Contract title
Contract firm(s)
Contract price
Contract scope of work
Contract start date and duration

Project
Completion

Project status (current)

Completion cost (projected)
Completion date (projected)
Scope at completion (projected)
Reasons for project changes
Reference to audit and evaluation
reports

Implementation

Variation to contract price

Escalation of contract price
Variation to contract duration
Variation to contract scope
Reasons for price changes
Reasons for scope and duration
changes

Information for reactive disclosure

Project information

Contract information

Identification and Preparation

Procurement

Multi-year program & Budget

Contract officials and roles

Project brief or Feasibility study

Procurement method

Environmental and social impact assessment

Tender documents

Resettlement and compensation plan

Tender evaluation results

Project officials and roles

Project design report

Financial agreement

Contract

Procurement plan

Contract agreement and conditions

Project approval decision

Registration and ownership of firms

Specifications and drawings

Completion

Implementation

Implementation progress reports

List of variations, changes, amendments

Budget amendment decision

List of escalation approvals

Project completion report

Quality assurance reports

Project evaluation report

Disbursement records or payment certificates

Technical audit reports

Contract amendments

Financial audit reports

Assurance Process
An Assurance Team reviews and reports on the
information disclosed to ensure compliance with the
disclosure requirement and highlight issues of
concern.
The Assurance Team is approved by the MSG and
usually appointed by the Host Organisation.

The Assurance Team is likely to be experienced

consultants or in some cases, a government agency.
It is appropriate to use a government agency when
there is a high level of pubic trust in the agency.

Multi-Stakeholder Group
Brings together representatives from government,
industry and civil society.
Usually operates on a voluntary basis to provide
oversight of the national programme.
It also has a crucial role in providing legitimacy to the
CoST programme.
Some countries have opted to establish an
independent entity (usually an NGO) to coordinate
functions of the MSG and National Secretariat.
Multi-Stakeholder working has definite advantages,
but it can also be time-consuming and difficult.

Impact: Cost savings in Ethiopia

Gindeber to Gobensa Road
Project, 33 km rural road, central
Ethiopia
Assurance report identified an
unimaginable volume of
excavation at design stage
MSG voiced concerns about
investment be siphoned off
Ethiopian Roads Agency
commissioned alternative design
Original designer debarred for two
years
Latest estimate is $3.7m cost
saving on original price.

CoST Ethiopia Team, Addis

Impact: Highlighting irregularities in Guatemala

Rehabilitation of Belize
Bridge, Guatemala City

Assurance process
identified irregularities in
procurement process

Special measures
intended for use during
humanitarian disasters had
been used

MSG concerned that

process was noncompetitive

General Directorate for

Roads annulled and
retendered the project.

Belize Bridge, Guatemala City

Impact: Building capacity in Malawi

CoST Malawi Baseline Study
identified average cost
overruns of 97%
Government undertook a
review of infrastructure
procurement
Found that many problems
stemmed from poor project
planning capacity
Separated Buildings
Department from Ministry of
Public Infrastructure and gave
power to outsource critical
functions.

Ali Hassan Mwinyi Road, Chichiri

Future trends
Growing demand for corporate disclosure
Promotion of transparency in PPPs

Possibility of a construction transparency index

Mechanisms to avoid initiative overload

p.matthews@constructiontransparency.org

www.constructiontransparency.org