Construction Sector Transparency Initiative (CoST)

CoST provides for the regular disclosure of material project information to a wide audience in a publicly accessible, comprehensive, and comprehensible manner. "Material" in this context is intended to indicate that sufficient information be provided to enable stakeholders to make informed judgments about the cost and quality of the infrastructure concerned. The core CoST concept is "get what you pay for" - the "you" being national governments, affected stakeholders, and the wider public.

Initially, consultations are being conducted in the following countries: Ethiopia, Malawi, Philippines, Tanzania, UK, Vietnam, and Zambia. For instance, the UK is piloting CoST on several public projects by disclosing information that will come under the scrutiny of an independently appointed assurance group that will report regularly on the projects to the multi-stakeholder group (MSG) which oversees and guides the pilot. The reports will then be made available publicly.

Governments can decide to pilot CoST in their country at any time. An interested government follows the guidelines and processes as articulated on the CoST website, including confirming its agreement with the CoST core principles, nominating a CoST champion inside government to drive the process, and establishing a MSG (comprising government, civil society, and private sector representatives). The UK-based CoST secretariat provides financial and technical support to all countries during the pilot phase, with lesson sharing amongst the pilot countries facilitated by the International Advisory Group (IAG). The core elements of CoST implementation are: project selection, information disclosure, monitoring and evaluation and its governance, as well as adherence to multi-stakeholder principles.

An essential feature of CoST is the engagement of a wide range of stakeholders in publicly financed construction projects: procuring bodies, public financial management bodies, construction companies and associations, civil society, external (i.e. non-governmental) providers of finance or loan guarantees, and other international partners. Civil society is actively engaged as a participant in the design, monitoring, and evaluation of this process, and contributes towards public debate.

Ensuring the free flow of information is the core focus of the CoST process. The disclosures required by CoST include, for example, a description of the project, its purpose and location and, at the implementation stage, summary details of the original and final project specification, project cost, contractor, and completion dates. The disclosures also include justification for any significant differences between the original and final information, as well as project evaluation and completion reports. "Disclosure of raw information on its own is unlikely to be sufficient to achieve greater accountability due to its complexity. The disclosures need to be reviewed and analysed to ensure that they are comprehensible to all stakeholders. CoST introduces a structure to meet this need." Namely, the adequacy of material project disclosures and audits are assessed by an independent, objective, and technically competent Assurance Team, with publication of reports including any causes for concern in the information disclosed. Full details of the process of ensuring transparency may be accessed on the CoST website.

Transparency.

According to organisers, public-sector infrastructure projects make a major contribution to economic growth and poverty reduction. However, mismanagement and corruption during the planning, implementation, and monitoring of construction projects can undermine the expected social and economic benefits. Recent studies show that corruption in public construction contracts is widespread, with bribes often accounting for 10% or more of the contract price. "Corruption allows unnecessary, unsuitable, defective and dangerous construction projects - buildings that collapse and roads that break up. Corruption also undermines the rule of law and hinders the development of strong and accountable institutions that are essential for economic growth and social justice. The effects of mismanagement and corruption are especially hard on the poor, who are most reliant on the provision of public services."

"Ensuring greater disclosure of information relating to public construction projects, in particular the basis on which the project was commissioned, project evaluation and any significant changes from the original tender document along with the reasons, in particular on cost, it can help to raise the level of scrutiny. It also aims to ensure greater awareness of the project evaluation. By allowing the public to make the comparisons between what was planned and what was delivered as well as to raise questions the aim is to reduce wasted opportunities and expenditure."