effective and transparent delivery of large

EFFECTIVE
AND
TRANSPARENT
DELIVERY OF LARGE
INFRASTRUCTURE
PROJECTS
Presentation – 1 March 2016
Forum: « Reficar, anatomy of a scandal »
Matthieu CAHEN, Policy Analyst
Infrastructure matters
• Infrastructure investments are expected to
provide tangible impacts on growth, quality of
life and productivity.
• Total global infrastructure investment
requirements by 2030 will come to USD 71tn
(3.5% of the annual World GDP from 2007 to
2030).
• A large share of infrastructure investment are
and will be borne by governments
• The government of Colombia developed an
ambitious infrastructure plan
And so does procurement
Government procurement as share of GDP and of total govt. expenditures
Source: OECD National Accounts Statistics. (2013)
3
And it matters for everyone
• For the private sector, public sector efficiency is the
second business priority area for reform after
product market regulation.
And public procurement the top priority in this
sector:
4
BIAC Economic Survey, 2014
What Strategic Procurement can bring to efficient
and transparent delivery of Infrastructure?
Strategic procurement can help countries
addressing the “four Cs” in infrastructure
projects:
• Inadequate Cost recovery
• Corruption
• Insufficient Competition
• Low Credibility of institutions.
The 2015 Recommendation on Public
Procurement: 12 integrated principles
Transparency
Accountability
Access
EProcurement
Participation
Evaluation
Efficiency
Integration
Integrity
Capacity
Balance
Risk
Management
6
Promoting a culture of integrity
• Infrastructure projects are prone to
integrity risks because of their magnitude
• TI, the OECD and the American Society of
Civil Engineers estimate the costs of
corruption between 10% and 30 % of
investment
• Given their complexity, infrastructure
projects owners should go beyond abiding
by existing laws and regulations
Creating the right environment
• An infrastructure environment promoting
a culture of integrity starts with a skilled
and mature organisation, notably for the
procurement workforce.
• Capability’s assessments should be
exercised at all level of governments
involved in infrastructure projects.
Effective processes
The example of Crossrail
Source: Crossrail
Skills are crucial to ensure awareness
of integrity risks
New Zealand implemented a procurement capability index which participates
to define allocation of budgets between government agencies.
Source: New Zealand Government Procurement, Ministry of Business, Innovation and Employment
Ensuring transparency throughout
infrastructure projects
• Develop a comprehensive project risk map
including integrity risks
• Promote strategic oversight
• Disclose project performance over time
11
Mitigating integrity risks
Procurement processes for the New International Airport
of Mexico City are subject to social oversight aiming at
ensuring the integrity of processes
Oversight: from compliance to advice
• The OECD and ANAC developed Highlevel Principles for Integrity,
Transparency and Effective Control of
Major Events and Related Large
Infrastructure
• These Principles promote the
implementation of a « collaborative
supervision and control » model
Shedding light on performance of
infrastructure projects
Open data initiatives and open contracting
promote transparency in infrastructure projects
and reinforce trust of citizens
14
Conclusions
• Integrity and transparency risks are
integral to the overall infrastructure
project risk management strategy.
• Evolution of the project impacts strategic
decisions necessary to mitigate those risks.
GRACIAS!
[email protected]
For more information on OECD work on public procurement
http://www.oecd.org/gov/ethics/integrityinpublicprocurement.
htm