Why Uganda needs the construction sector transparency initiative

OPINION | CONSTRUCTION

By Olive Kabatwairwe

The construction of public infrastructure is a key sector in which enormous public resources are required and spent per year. Estimates for over the next decade world over are indeed huge.

Uganda already spends approximately $1b per year on public infrastructure, equivalent to about 17% of its Gross Domestic Product. In addition, the Government spends at least sh3.3 trillion annually to improve its road network to bitumen standard.  The roads in Uganda are used to transport around 97% of the country's cargo, yet the quality of the roads being constructed remains substandard, in some cases. The status is rather not different from other infrastructure like buildings, bridges, airport/crafts, stadiums, among others. The low performance in the sector has been attributed to limited information disclosure of project data, limited compliance with the legal framework on information disclosure and on international standards such as the infrastructure data standard, limited stakeholder participation and a weak citizenry agency to demand for accountability. Limited disclosure of infrastructure data has resulted into infrastructure projects being riddled with contract mismanagement, delays in procurement, weak supervision, safety and environmental challenges, time overruns, budget overruns, low absorption and corruption, among others as revealed by CoST Uganda First Assurance Report August 2017.

This situation has brought unnecessary, unsuitable, defective and dangerous construction projects- buildings that collapse and roads that break up. Recent studies show that corruption in public infrastructure contracts is widespread, with bribes often accounting for 10% or more of the contract price (Permanent Secretary, Ministry of Works and Transport February, 2017). The negative effects of mismanagement and corruption in public infrastructure projects are felt hard by the poor citizens, who are mostly reliant on public services. Once a public infrastructure project is compromised at any stage, this results into its failure and shortened life span. Corruption in construction results into poor service delivery, loss of property, loss of revenue, lower quality of public infrastructure, increased costs of construction and decrease in investment of foreign and domestic investors. Some of the key drivers of this corruption include low levels of transparency and accountability occasioned by limited disclosure of vital information

The limited disclosure of information is mainly attributed to lack of a specific law or policy provision on access to and pro-active and re-active disclosure of infrastructure data at project identification, funding, feasibility, planning, implementation and completion, and changes to contract time/cost during implementation. The current Public Procurement and Disposal of Public Assets Authority (PPDA) law and regulations are limited in their scope as they only demand for disclosure of information on projects whose value is above a set financial threshold. The same law only requires PPDA to mainly disclose information centered on the tendering processes and tender awards. In addition, the legal and policy provisions only favour participants in the procurement process and tender market but do not focus at informing the public about projects awarded. The law doesn't provide a level playing ground for bidders, and encouraging the citizens to build trust in the procurement processes among others.

CoST Scoping Study published July 2017 noted that Procurement Entities (PEs) only disclose a quarter of the information on specific projects compared to the 40 data points that would be required pro-actively under the Infrastructure Data Standard. The Scoping Study further highlights other barriers to information disclosure including; lack of a database to store disclosed data, poor information management systems and limited capacity of Procurement Entities; the cost involved in compiling information in the absence of electronic data storage; scepticism over the potential benefits of wider disclosure; limited awareness of the legal requirements; limited financial resources; and the complex issue of governance, ignorance about the law, poor information storage and retrieval systems, as well as inadequate financing which undermines the full implementation of the law. These issues have led to Procurement Entities denying citizens and other stakeholders' access to some of the critical data on infrastructure projects, resulting in little transparency around projects.

 

The challenge of limited disclosure of information is a major concern given the level of competition for infrastructure contracts yet little and in many occasions no information is available for supervision and design contracts. This leads to some lengthy and negative legal battles and investigations, resulting in delays of major construction projects such as Karuma Hydro Power Dam and the Kiryandongo - Masindi - Hoima - Kyenjojo roads and recently Tirinyi road among others. Additionally, given the major contribution of public sector infrastructure projects to the country's Gross Domestic Product (17%), economic growth and poverty reduction, and the huge budgets required annually(around USD$ 1 billion), disclosure of information on such projects is very critical.

What Uganda should do?

Disclosure of CoST Infrastructure Data Standard (IDS) works better when every procuring entity (PE) follows the same general policies and laws on the release of Infrastructure Data pro-actively and re-actively, procedure for its use, and compliance with technical standards for both reactive and proactive disclosure. Uganda should adopt the IDS to ease information disclosure on basic project data.

Uganda needs to put in place or to incorporate policy provisions for the adoption of the Infrastructure Data Standard.  In Uganda although there exists political will and support for CoST to successfully promote the Infrastructure Data Standard. For instance there is an Infrastructure Monitoring Unit in State House, which reports to the President, the Monitoring and Evaluation department in the Office of the Prime Minister among others report on how the sector is being implemented. The challenge though is that most agencies in the sector have no direct synergy with the line Ministry and other key players in the construction sector to strengthen transparency and accountability. The existing policies are not specific on IDS and are less favourable to the Infrastructure Data Standard implementation.

There is need for government, particularly at top executive level, to fully commit to disclosure of pro-active and re-active infrastructure data at all stages using the Infrastructure Data Standard. This will require parliament, particularly the committee on Physical Infrastructure, to fast track the passing of the Uganda Construction Industry Commission (UCICO) bill into law, inclusion of CoST Infrastructure Data Standard in the Procurement policy and Public Procurement and Disposal of Public Assets Authority Act amendments.
 

CoST is spearheading international efforts by strengthening transparency and accountability in public infrastructure. We need this focus on transparency and accountability as it creates better value for everyone. The MSG continually engages the Procurement Entities to ensure disclosure of contract information which makes it easy for the Non-Governmental Organizations, Civil Society Organizations and the media to use the information to support in monitoring and engagement. The Multi-Stakeholders Group always brings the findings to the Procurement Entities for handling through Assurance Reports with recommendations. The joint effort of the Procurement Entities monitoring team and CoST assurance teams reduces the gaps that have been existing in the contracts performance.
 

The Multi-Stakeholders Group further engages the Private Sector involved in infrastructure development such as contractors, consultants, Engineers, and the business arm to comply with the disclosure framework established by the Government. CoST programme has a component of building the capacity of the Private sector, Civil Society organizations and the media that will be using the information being disclosed by the Procurement Entities.

The writer is the Uganda manager construction sector transparency initiative