Afghanistan has signed up to the global Construction Sector Transparency Initiative (CoST) in an effort to promote accountability and value for money on its public sector projects.
Afghanistan’s Ministry of Economy will lead a national CoST programme requiring publicly-funded projects to regularly publish information to help the public make informed judgements about cost, quality and value for money.
The move follows recommendations made by the Afghanistan Joint Anti-Corruption Monitoring and Evaluation Committee on the need for greater transparency in the construction of infrastructure in the country and President Hamed Karzai’s 2012 executive decree, which focused on the fight against corruption.
Afghanistan joins 10 other countries in the CoST initiative, which include the UK, Guatemala, Vietnam, Zambia, Ethiopia and El Salvador. The initiative is supported by the UK government and global financial institutions.
High levels of financial waste are frequently observed on public construction projects in post-conflict states, which can suffer from corruption and a lack of adequate monitoring mechanisms.
Road construction in Afghanistan is a major absorber of aid money and CoST reports that the cost of upgrading Kabul’s symbolic airport road, Bibi Mahro, was estimated to be 10 times that of other local road projects.
Conversely, countries that have joined CoST have been able to save money on road construction. Ethiopia’s CoST Assurance Team recommended the adoption of an alternative design for a 33km rural road, which saved an estimated $3.7m on a $10m contract.
Apart from financial benefits, CoST has also led to changes in government procedures or institutional frameworks. A CoST pilot study in Malawi revealed average time overruns on sampled construction projects of 97% and average cost overruns of 6%.
A subsequent review found that the Ministry of Transport and Public Infrastructure had capacity gaps in managing projects, so parliament approved a reform package to improve management capacity and ensure more efficient delivery. The country’s Public Procurement Act was also revised to require procuring bodies to disclose information in accordance with the provisions of CoST.
Meanwhile, in Tanzania, CoST’s examination of a project to upgrade health facilities in Tabora Municipality revealed that an unusually large sum had been budgeted for contingencies, prompting concerns about overpricing and possible malpractice.
Further investigation showed that the quantity surveyor had simply lacked the time and support to prepare a thorough and accurate bill of quantities and had inflated the contingency to manage the risk of unforeseen costs. CoST’s assurance team informed the client of the need to invest in additional capacity to ensure better financial management on projects.
