EFFECTIVEAND

TRANSPARENTDELIVERY OF LARGE

INFRASTRUCTURE PROJECTS

Presentation – 1 March 2016Forum: « Reficar, anatomy of a scandal »Matthieu CAHEN, Policy Analyst

• 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

Infrastructure matters

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And so does procurement

Government procurement as share of GDP and of total govt. expenditures

Source: OECD National Accounts Statistics. (2013)

And it matters for everyone

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• 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:

BIAC Economic Survey, 2014

Strategic procurement can help countries addressing the “four Cs” in infrastructure projects:• Inadequate Cost recovery• Corruption• Insufficient Competition• Low Credibility of institutions.

What Strategic Procurement can bring to efficient and transparent delivery of Infrastructure?

Participation

Efficiency

Capacity

Integrity

Access

Balance

E-Procurement

Evaluation

Risk Management

Transparency

Integration

Accountability

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The 2015 Recommendation on Public Procurement: 12 integrated principles

• 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

Promoting a culture of integrity

• 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.

Creating the right environment

Effective processesThe 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

• Develop a comprehensive project risk map including integrity risks

• Promote strategic oversight

• Disclose project performance over time

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Ensuring transparency throughout infrastructure projects

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

• The OECD and ANAC developed High-level 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

Oversight: from compliance to advice

Open data initiatives and open contracting promote transparency in infrastructure projects and reinforce trust of citizens

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Shedding light on performance of infrastructure projects

• 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.

Conclusions

GRACIAS!Matthieu.Cahen@oecd.org

http://www.oecd.org/gov/ethics/integrityinpublicprocurement.htm

For more information on OECD work on public procurement