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Transparency International Says Construction Most Vulnerable To Corruption

A new report says construction, more than any other segment of a nation’s economy, is prone to corruption. Transparency International says the corruption is often so bad that it “plunders the economy…and ravages the environment.”

In its Global Corruption Report, Transparency International says, “The scale of corruption is magnified by the size and scope of the construction sector.” Muzong Kodi is the group’s director for Africa and the Middle East.

He says, "It’s estimated that the construction sector is valued at about three point two trillion dollars per year."

The report says, “Corrupt practices are found at every phase in construction projects.” It says they are vulnerable for several reasons. These include “fierce competition, numerous levels of official approvals and permits, and large number of sub-contractors. It also says some projects are unique, making them prone to delays and cost overruns.

"What we notice is that most of the contracting processes that are used in this particular sector are not transparent. So, this gives the possibility for corrupt activities to take place. It’s more so in this sector than most others," Mr. Kodi says.

The Transparency International report lists what are called “Monuments to Corruption.” They include several African projects, such as the Lesotho Highlands Water Project in which two million dollars in bribes were allegedly paid. That case is currently in the courts.

Mr. Kodi praises Lesotho for taking action.

"This is the case study that has shown that it’s possible even for very small countries to tackle this scourge of corruption in the construction sector." he says.

Also listed is the Bujagali Dam project in Uganda, which is being investigated by the World Bank and four different governments for bribery.

Mr. Kodi says corruption can lead to environmental damage because bribes are paid to “ignore environment and social hazards.”

He says, "Corruption is a big, big obstacle to sustainable development. We’ve seen in many countries resources being diverted from very crucial and basic sectors like education and health, which are needed by the population. And therefore, changing the whole economy and shaping it in a way that would make it possible for corrupt activities to continue and to thrive in countries."

The Global Corruption report makes a number of recommendations.

He says, "We’re recommending that the authorities ensure that contracts are subject to open, competitive bidding. We’re also recommending that a blacklist of companies that are caught bribing be put in place. We’re also recommending public disclosure of the entire process of procurement and ensuring that monitoring by independent oversight agencies and civil society takes place."

The report also says, “The challenges faced by conflict-affected countries are formidable…and…the need for anti-corruption measures is particularly acute in the first years after war.” For example, Transparency International calls on the international community to ensure there’s transparency in the rebuilding of Iraq.