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Corruption a headache in construction industry
2007-05-19 09:24:25
By Pascal Shao
Corruption accounts for the loss of an estimated 20 per cent of the government funds meant for procurement services, according to a consultant with Kilimanjaro International Corporation Limited.
The consultant, Leonard Chacha, gave the remarks to that effect at a workshop on project anti-corruption systems held in Dar es Salaam yesterday.
The workshop, which brought together construction consultants and procurement stakeholders, was discussing the most effective ways of combating procurement corruption in the construction industry.
According to Chacha, 70 per cent of the annual government budget goes to procurement activities but corrupt elements eat up a whole one-fifth.
`The amount is lost in the form of sub-standard procured services or commodities, bribes on winning tenders and project executions,` he said, noting further: `Nobody can doubt about the 20 per cent loss in the procurement of services but many might wonder how exactly to contain the corruption at play,` he noted.
The consultant noted that the findings were obtained from various sources, among them researchers, the World Bank and reports by the Controller and Auditor General, `all of whom concurred on the level of losses`.
Contributing to the debate at the workshop, Catherine Stansbury from Transparency International of United Kingdom said the construction sector was generally perceived as the most corrupt industry worldwide.
It would be safe to assume that where there is a significant construction project there is often a very real possibility of corruption, she explained.
`Corruption can occur during any phase of a construction project such as project identification, financing, designing, tendering and execution,` noting that in each phase corruption may involve the project owners, funding agencies, consultants, contractors, sub-contractors, joint venture partners and agents.
`Focusing anti-corruption measures on only one phase simply moves corruption to other phases and, in order to be effective, the measures must impact on all phases and on all major players,` she said.
Philip Marmo, Minister of State in the President`s Office (Good Governance), opened the workshop by noting that corruption in public construction sector is possibly one of the greatest obstacles to economic development.
He said corruption may lead to projects being commissioned dubiously because there could be bribery and fraud in the selection of contractors, project prices could be grossly inflated and the end product could thus be defective or dangerous.
`This result in misuse or poor use of public funds and infrastructure that is inadequate, defective and dangerous and the construction industry suffers while corrupt and incompetent practitioners prosper,` observed the minister, under whose office the Prevention of Corruption Bureau falls.
`Competent and honest contractors fail to compete, causing them to withdraw themselves from the market and the field is left for further corruption while the industry falls into disrepute,` he added.
The workshop was expected to come up with proposed amendments to the just passed Prevention and Combating of Corruption Bill, which seeks to plug all loopholes leading to corrupt practices.
The thrust of the proposals is on monitoring and assessing procurement and execution processes with regard to major design and construction contracts.
The proposed amendments would focus on the need to deter, prevent and detect corruption through independent assessment, transparency, due diligence, contractual commitments and management programmes.
Others are raising public awareness, reporting and enforcement and capacity building in fighting procurement corruption in the construction industry.
If approved, the proposals would lead to the establishment of an independent body responsible for screening projects for corruption and report suspicions of foul play to the authorities and major project players.
The workshop was hosted by Public Procurement Regulatory Authority and attracted construction industry stakeholders and representatives of the United States Agency for International Development and Transparency International.
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